Usd/cad Drops Below 1.3000 As Oil Approaches Weekly Top, Usd Eases Ahead Of Data
- Trade Ideas
- 2022, 13 May
- USD/CAD renews intraday low as sellers attack 1.3000 threshold, extends pullback from 18-month high.
- WTI crude oil prints three-day uptrend amid softer oil, cautious optimism in Asia and geopolitical concerns over Russia.
- US dollar eases on firmer yields, stock futures ahead of US consumer sentiment data.
USD/CAD takes offers to renew intraday low around 1.2995, down 0.36% on a day, as markets cheer USD pullback, as well as firmer oil prices, during early Friday morning in Europe. The bulls, however, remain cautious while waiting for the US data for May.
WTI crude oil rises 1.0% to $107.80 during a three-day uptrend, eyeing the weekly top of late. The black gold’s latest run-up could be linked to the cautious optimism in the Asia-Pacific region, as well as fears of a European oil embargo over Russian energy imports.
That said, China’s push for more employment generation to the college students and hopes of reaching covid-zero conditions in Shanghai after mid-May previously favored USD/CAD bears. On the same line was a three-day “at home” stay for residents for covid testing to tame and confirm the covid resurgence in Beijing. However, chatters surrounding Taiwan and the latest warning from Aussie Defense Minister trim the optimism in Asia.
Amid these plays, the US 10-year Treasury yields portray a corrective pullback after refreshing a two-week low the previous day, around 2.89% by the press time, whereas the S&P 500 Futures print rises 1.0% while licking its wound near one-year low.
It’s worth noting that cautious comments from Fed Chairman Jerome Powell and San Francisco Fed President Mary Daly join the pre-data anxiety to keep the US dollar under pressure. Additionally, the US Producer Price Index (PPI’s) matching of 0.5% MoM market consensus also tests DXY bulls near a 20-year high.
While the intraday DXY moves will rely on the preliminary readings of US Michigan Consumer Sentiment data for May, expected 64 versus 65.2 prior, making it the key, headlines concerning coronavirus, geopolitics and Fedspeak will also be important for USD/CAD traders.
Unless providing a daily closing beyond the monthly resistance line, around 1.3080 by the press time, USD/CAD pullback can’t be ruled out.
However, 10-DMA and a three-week-old rising trend line, respectively around 1.2930 and 1.2870, limit the short-term downside of the pair.
Sell below 1.3035 for 1.2975 and 1.2950
Buy above 1.3035 for 1.3055 and 1.3075