USD/CAD pulls back amid WTI recovery, USD weakness
- USD/CAD reverses from weekly high amid a recovery in oil prices, greenback declines.
- The US-China trade tussle and global slowdown fears remain in the spotlight.
USD/CAD aptly portrays the recent declines of the US Dollar (USD) and recovery in oil prices as it dips to 1.3300 before Thursday’s European session begins.
The US Dollar (USD) recently lost its allure after the US President Donald Trump’s tweet on Hong Kong triggered fresh political drama which might spread over the not so good trade relations between the US and China.
Recovery in oil prices can best be described based on the likely odds that the US-China trade talks will take place in early September while The Guardian’s report of British dual being detained in Iran signal fewer improvements in the UK-Iran relations and further problems for the energy world.
Moving on, the US Retail Sales, Industrial Production and the Philadelphia Fed Manufacturing Survey data will be watched together with Canadian ADP Employment Change for July.
It should also be noted that the present market pessimism, triggered mainly due to the crash in the US treasury yields, can get worse if the US open flashes negatives for China.
Technical Analysis
While 1.3220/25 and current month high around 1.3245 act as immediate upside barriers, 1.3375 and June month top surrounding 1.3435 could lure buyers during further advances. On the downside, June 10 low of 1.3242 and 50-day simple moving average around 1.3180 should be watched closely while prices decline.