Bullish CAD: Crude Oil & US CPI Key Factors
What's on this page
USD/CAD ANLAYSIS & TALKING POINTS
- Crude oil to be closely monitored after large decline.
- US CPI central to Fed expectations.
- Long upper wick & bearish divergence couple to provide downside bias.
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CANADIAN DOLLAR FUNDAMENTAL BACKDROP
The Canadian dollar has been steadily weakening against the USD over the last few weeks following on from some hawkish messaging from Fed Chair Jerome Powell as well as a significant drop in global crude oil prices. With crude oil now finding some support, and the potential for OPEC+ to announce an extension of their voluntary production cuts through to next year, the loonie may well appreciate against the greenback short-term.
USD/CAD ECONOMIC CALENDAR (GMT +02:00)
Source: DailyFX Economic Calendar
Chart prepared by Warren Venketas, IG
USD/CAD price action above shows the pair trading within the longer-term upward channel (black) while the Relative Strength Index (RSI) suggests bearish/negative divergence. The recent long upper wick candle may supplement this outlook and potentially see levels below 1.3800 once more.
Key resistance levels:
Key support levels:
- 1.3700/Channel support
IG CLIENT SENTIMENT DATA: MIXED
IGCS shows retail traders are currently net SHORT on USD/CAD, with 72% of traders currently holding short positions (as of this writing).
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.