- The USD/CAD pair is trading near 1.3290 during early Monday.
- The pair refrains from breaking 50-day SMA resistance as welcome news report for the US-China trade deal and soft greenback drags the quote down.
- 1.3300 acts as immediate resistance for the pair whereas 1.3240 may provide nearby support.
USD/CAD remains a shade lower than 1.3300 round-figure during early Monday trading. The pair kept lagging behind 50-day simple moving average (SMA) as positives for the US-China trade deal favored commodities and linked currencies like Canadian Dollar (CAD). Also, weak greenback added strength to the momentum in support of the USD/CAD pair’s pullback.
In addition to the Wall Street Journal’s report signaling an agreement between the US and China is taking shape, Bloomberg also quoted China saying substantial progress made in trade talks with the US.
Following the headlines, not only commodity like Crude was up but commodity-linked currencies like AUD, NZD and CAD were also gaining strength. It should be noted that China is the world’s largest industrial player and hence positives for the dragon nation signal increase in future commodity demand that is positive for the Aussie, Kiwi and Loonie in-turn.
While CAD gains were limiting the pair’s upside, comments from the US President Donald Trump played its role in dragging the quote downwards. As per Reuters report, President Trump again conveyed his dissent with the Federal Reserve policy and strong US Dollar by terming it prohibitive while dealing with other nations.
In spite of the latest news showing brighter chances of a trade deal between the world’s two largest economies, differences do prevail among top-tier decision makers of the US and China. Recently, Reuters reported China’s Deputy Foreign Minister Zhang Hanhui showing his disappointment over the US performance over trade and security.
Hence, while the latest developments at the trade front support solution of the US and China’s trade problems with each other, the actual outcome is yet to be delivered and may keep offering volatile sessions ahead.
USD/CAD Technical Analysis
50-day SMA level of 1.3300 seems an immediate cap on the pair’s upside, a break of which can escalate the pair’s recovery toward 1.3330 and 1.3380.
Should the pair remains weak, 1.3240 and 1.3200 are likely nearby supports that can lure sellers ahead of pleasing them with 1.3120 rest-point.
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