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  • The USD/CAD remains glued to solid gains around the previous peak.
  • The price of WTI Crude Oil recovers from its daily low, while the dollar index trades higher amid a mixed sentiment.
  • Near-term directions may be set by the US and Canada’s April PMIs, but the FOMC meeting on Wednesday is crucial.

Monday’s intraday gains for the USD/CAD price remain around 1.2870 as the European session starts. The outlook remains strongly positive for the pair.

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The recent loonie slide can be attributed to the US dollar’s inability to hold a 20-year high as traders prepare for Wednesday’s Federal Open Market Committee (FOMC) meeting.

Oil prices are recovering after losses in Asia due to dollar consolidation. Meanwhile, WTI crude oil prices rose 0.10% at press time, rising to 103.35. Concerns about Russia’s attack on Mariupol and an oil embargo from Europe have also driven up oil prices recently, even as China’s Coronavirus woes test energy bulls.

The US Dollar Index (DXY) diverged from higher US Treasury yields as the benchmark 10-year rate rose 5.7 basis points (bps) to 2.942% at the latest point in time. Eurostoxx 50 and DAX suffered losses no later than Friday’s Wall Street moves, and the Asian session was also pessimistic.

What’s next to watch?

Initially, the Fed’s troubles may bring downward pressure on the US dollar, which could help USD/CAD turn bearish. Nevertheless, today’s US and Canadian PMIs could indicate intermediate directions.

Similarly, Canada’s S&P Global Manufacturing PMI could decline from 58.9 to 57.9, while the US ISM Manufacturing PMI could rise to 58.0 from 57.1 previously. So along with oil prices rising and risk appetite remaining weak, USD/CAD should remain flat in the north.

USD/CAD price technical analysis: Bulls to continue

 

The USD/CAD priusd/cad pricece remains near the top, around 1.2870 area. The pair seems to form a double top. So, we can expect a minor downside correction around the current level ahead of further upside gains. The key SMAs on the 4-hour chart lie above another, pointing at further gains.

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The average daily range is 45% so far, which indicates normal volatility for the day. The volume data shows a constant rise with the rise in price. It is a strong indicator of bullish continuation.

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