The USDCAD pair is currently trading in Loonie’s favor with price moving around 1.27 handle and consolidating around 1.2785 to 1.2744 during majority of Asian market hours. Canadian market was closed on Monday on account of Victoria Day and US markets had very little trigger to push it forward. An increase in Oil price since trading session began for the week and lack of strong triggers resulted in Greenback losing ground to Loonie. Also contributing to Greenback’s bearish momentum are lack of support/mentioning of near future rate hike by two of three FOMC members during yesterday’s speech.
USDCAD Pushes Lower
Loonie is expected to remain strong during today’s trading session as WTIUSD hit $72.77 per barrel and continues to move on Bull Run. Loonie being a commodity linked currency (in this case associated with crude oil) is expected to continue gaining upper hand against its major trading ally USD as long as oil price remains bullish. Currently the pair is on a range bound momentum with a wide price band capped at 1.29234 on top and 1.27438 at the bottom.
While 2018 FOMC voting member Raphael Bostic failed to provide any clues about rate hike during this speech yesterday, he mentioned that U.S. economy is close to meeting the Fed’s employment and inflation goals, with growth of around 2.5 percent expected this year. However another FOMC member Neel Kashkari during a Q&A session during early Asian market hours spoke on a dovish note where he mentioned that the job markets could turn sloppy in near future and wage growth has not picked up yet and so he wishes to allow economy to continue to strengthen at current pace. This along with low Treasury note yields since trading session began for the week has had a detrimental effect on Greenback so far.
Macro Calendar remains light for US during today’s market hours however Canadian market is scheduled to see Wholesale Sales data. A positive reading in Whole sale data and continued growth in Oil price as trading session moves further into the day could help Loonie break free from resistance in existing price band and gain some bullish headway. Expected support and resistance for the pair are at 1.27395 / 1.27254 / 1.26864 and 1.27839 / 1.28456 / 1.29104 respectively.