The USD / CAD resumed rising to the resistance at 1.3345 at the time of writing after bearish correction moves pushed the pair towards 1.3283 support, the lowest for 3 weeks as the Canadian dollar gained stronger momentum from recent strong gains in global crude oil prices. We still expect the pair to continue its bullish trend as long as the 1.3000 resistance remains intact. The pair will await today’s release of US producer prices alongside weekly jobless claims. Canada is announcing new house prices. Yesterday, a stronger-than-expected rise in US consumer prices was announced and the Federal Reserve reported the minutes of its last meeting in March.
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During the March meeting, the Fed announced that its balance sheet would be reduced to $15 billion in May and end in September. Currently, the Fed is cutting its balance sheet by $ 30 billion a month. The bank’s signals indicate the possibility of a more dovish policy in response to the recent weak economic data from the U.S, and the Federal Reserve has become more pessimistic in 2019, saying that the rate hike was not planned until 2020. Poor economic growth and low inflation expectations may prompt the Reserve Bank Board to cut interest rates, while faster growth and high inflation expectations could push it to resume raising interest rates. US President Donald Trump said last week he wanted the Fed to start lowering interest rates.
Oil prices continued to rise and climbed above the $64 a barrel high for the first time since early November. Continued civil unrest in Libya will support the upward trend. Canada is a major oil producer, so rising oil prices are good news for the Canadian currency, which is trading at its highest level since March 21. Opec members will hold a key meeting in Vienna on Thursday and any movement in oil prices can affect the direction of the USD/CAD pair.
The most important support levels for the USD/CAD today: 1.3290, 1.3200 and 1.3125, respectively.
The most important resistance levels for the USD/CAD today: 1.3420, 1.3500 and 1.3585, respectively.