USD/CAD: WTI rally pleases sellers, second-tier data in focus
- A sustained increase in crude oil prices, Canada’s main export, portrays the USD/CAD pair’s recent pullback.
- Canadian housing market details and the US factory orders data will be in the spotlight for now.
The USD/CAD pair is witnessing pullbacks to 1.3370 during the early Asian session on Monday. The quote surged to a week’s high on Friday based on mixed employment data from the US and Canada. However, investors focused more on the Crude price rally during early-day while covering some profits. Second-tier data from the US and Canada could offer fresh impulse to traders.
On Friday, the decline in Canadian employment change contrasted to the surge in the US non-farm payrolls (NFP) and fuelled the pair’s earlier recovery. However, optimism surrounding the trade deal between the US and China confined the pair’s additional upside as China is one of the largest commodity consumers and Canada depends heavily on Crude exports.
During early Monday, WTI Crude oil surged to the fresh five-month high as investors took advantage of the weekend news favoring the US-China trade deal while also focusing more on the US sanction on Iran and Venezuela. Reuters report mentioned Energy consultancy FGE’s report as an additional reason for the energy price increase.
Investors gave little attention to the International Monetary Fund’s (IMF) Global Financial Stability Report (GFSR) that signals that the Canadian housing market is at risk.
Next up in the traders’ radar will be Canadian housing market data coupled with the US factory orders. Canada’s March month seasonally adjusted housing starts (YoY) could increase to 193.0K from 173.1K whereas February month building permits (MoM) might register +0.2% growth against -5.5% earlier contraction. Moreover, February month US factory orders (MoM) are likely to register a contraction figure of -0.6% compared to +0.1% earlier growth.
While upbeat sentiment at energy front is likely to help the Canadian Dollar (CAD), the overall strength of the greenback (USD), coupled with second-tier data could question the USD/CAD pair’s declines.
USD/CAD Technical Analysis
Sustained dip beneath 1.3370 immediate support can fetch the quote to 1.3330 and 1.3300 while 50-day simple moving average (SMA) figure of 1.3290 may gain attention afterward.
On the flipside, highs marked during March-end, coupled with a five-week-old descending trend-line, may challenge buyers near 1.3440-45, a break of which can please them with 1.3460 and 1.3500 numbers to the north.