The USD/CAD pair saw sharp downside price action across yesterday’s trading session. Positive crude oil price in the global market and optimism surrounding Sino-U.S. trade talks, lingering influence from Canadian GDP were some of the factors that support Loonie bulls while prevalent risk on trading activity in the global forex market weakened USD leading to yesterday’s dovish price action. The pair then saw a sharp decline during Pacific-Asian market hours post-speech by BOC governor Stephen Poloz which caused the pair towards 1.33 handle. The pair opened for the day well near previous session lows and maintained stead dovish price action as Loonie bulls managed to retain the upper hand.
US API Stockpile Data Eyed For Directional Bias
Aside from healthy risk on investor sentiment in the broad market, Loonie was also supported by positive price action from Crude oil market. Crude oil price today continued to scale new 2019 highs as news hit the market of a major port in Venezuela closing down its operation and a new round of US sanctions on Iranian crude oil. The impact of these news updates was a change in demand to supply ratio which favored supply dynamics that could boost crude oil price. A lower supply amid healthy demand when OPEC supply cut enforcement has already reduced the output is a positive factor for crude oil bulls pushing the price well above $61 per barrel in the spot market.
Canadian Loonie gains whenever crude oil gains in the global market and this is the major reason for Loonie bulls retaining control over price momentum so far. Investors now await US macro data updates for short term profit opportunities and directional cues. On the release front, Canadian macro calendar remains silent for the day while US macro calendar will see the release of Core durable goods order and API weekly crude oil inventory data. A build in weekly inventory stockpile could hurt Crude oil’s momentum weakening Loonie in the broad market later today which could help USD erase early loss while draw in inventory stockpile will help crude oil price go higher dragging the pair to new weekly lows.
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This article was originally posted on FX Empire
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