Loonie Bid on Upbeat Canadian Balance of Trade Data

USD/CAD ANLAYSIS & TALKING POINTS

• Crude oil costs discover some assist right now giving CAD a lift
• Canadian stability of commerce outperforms US report.
• Bull pennant appears ripe for a breakout however key Canadian and US knowledge in retailer tomorrow.

CANADIAN DOLLAR FUNDAMENTAL BACKDROP

The Canadian greenback has been consolidating of latest after a significant sell-off coinciding with declining crude oil costs. Considerations round a worldwide financial slowdown have led to demand forecasts being revised whereas the continuing banking crises has not allowed for commodity-linked currencies to prosper. Canada’s stability of commerce report (see financial calendar beneath) beat estimates right now (surplus) permitting for the loonie to seek out its footing in opposition to the USD whereas the US stability of commerce figures barely missed (deficit) along with the next preliminary jobless claims print.

Right this moment, the CAD has been stronger in opposition to the dollar regardless of the USD buying and selling greater on the day with crude oil and the aforementioned stability of commerce knowledge offering assist. Yesterday’s FOMC announcement erred on the dovish aspect of the equation and has led to a slightly softer greenback outlook as further charge hikes have been priced out for 2023 by cash market contributors.

USD/CAD ECONOMIC CALENDAR

Supply: DailyFX Financial Calendar

The remainder of the buying and selling day is more likely to stay comparatively muted forward of tomorrow’s Canadian employment and US Non-Farm Payroll (NFP) report.

TECHNICAL ANALYSIS

USD/CAD DAILY CHART

Chart ready by Warren Venketas, IG

Day by day USD/CAD worth motion is contained inside a bull pennant kind sample (black), historically related to a bullish continuation transfer from an upside breakout. I will probably be searching for a pennant resistance break and affirmation shut probably opening up the 1.3700 psychological deal with. In distinction, a pennant assist break may invalidate this sample and expose the 1.3500 degree as soon as extra.

Key resistance ranges:

• 1.3700
• Pennant resistance
• 1.3600

Key assist ranges:

• 50-day MA (yellow)
• Pennant assist
• 1.3500

IG CLIENT SENTIMENT DATA: BEARISH

IGCS reveals retail merchants are presently SHORT on USD/CAD , with 57% of merchants presently holding quick positions (as of this writing). At DailyFX we sometimes take a contrarian view to crowd sentiment however as a consequence of latest modifications in lengthy and quick positioning we arrive at a short-term draw back disposition.

Contact and followWarrenon Twitter:@WVenketas