The USDCAD pair on Wednesday saw positive price action as Crude oil weakened over US Crude oil inventory stockpile data. A build up in US weekly stockpile put an end to Loonie’s positive price momentum. Meanwhile, the US dollar which had already begun to gain momentum since late Tuesday rose up to the opportunity and made solid upward price action. However, the upside move faced resistance owing to disappointing US ADP Non-farm payroll data. Later during the early Pacific-Asian market hours, the pair traded range bound in the global market. The market saw optimism surrounding Sino-U.S. trade talks ease over lack of further headlines with key updates on ongoing trade talks.
IVEY PMI Eyed For Directional Bias
This caused risk appetite to ease in the market, adding dovish pressure to an already weak Loonie. However, a rebound in crude oil price helped prevent the US dollar from building up a strong rally to the upside. Still, disappointing EU macro data and declining European equities greatly affected risk appetite in European market hours which gave solid positive support to US dollar bulls from a fundamental perspective. This helped the US dollar resume its upward price action from the previous session albeit on a slower scale. Despite the prevalent positive environment in the crude oil market such as an increased disruption to global supply from the middle east and an OPEC enforced production and supply cut agreements, Crude oil price is facing significant pressure to make further gains.
US EIA weekly crude oil stockpile data showed an increase in inventory of over 7.2 million barrels. The has put a sharp hurdle on the path for crude oil price action which has resulted in the price of WTI Crude oil being trapped below $63 handle. Canadian Dollar being a commodity-linked currency suffered a loss of bullish influence over this hurdle. Brent crude oil is also trading slightly below $70 per barrel, and when respective price handles are breached, Crude oil is likely to regain positive price action. But ahead of crude oil price scaling said price handles, investors are focusing on macro data updates for short term directional bias. US calendar is set to see the release of Initial jobless claims data and speech by Mester and Williams while Canadian Calendar will see the release of IVEY PMI data. A disappointing Canadian data will help USD see further gains while positive outcome will result in USD gains being capped near intra-day highs where the pair will continue rangebound price action in American market hours.
Please feel free to let us know what you think in the comments below.