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    USD/CAD inter-markets: how far above 1.30? Pablo Piovano

    USD/CAD is now advancing above the psychological handle at 1.3000 the figure, levels last seen in early June, all framed within the current 6-session positive streak after June lows in the mid-1.2600s.Declining crude oil prices sent the barrel of West Texas Intermediate to test lows in the $47.00 neighbourhood, in turn adding extra selling pressure to CAD and conforming another pillar of the ongoing rally in spot.The greenback, when tracked by the US Dollar Index, has recovered the smile today, leaving behind yesterday’s dovish tone from the FOMC and managing to retake and advance beyond the critical 95.00 barrier. The up move in USD appears justified by today’s upside momentum in US yields and the Fed Funds rate contracts, all despite the probability of a rate hike by the Fed at the July meeting have drastically reduced to just above 7% according to the CME Group’s FedWatch tool.Looking ahead, crude oil dynamics plus yields differentials between US and Canada should remain the exclusive drivers for the pair, always bearing in mind the ‘data dependent’ stance of the Federal Reserve and any repricing of a rate hike in the near future.There’s not much in terms of resistance levels until the 1.3140/1.3200 band, where sits the June’s peak at 1.3144 (June 2), the 100D-SMA at 1.3159 and 1.3188, May’s top.


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