The Loonie trades sideways despite the stock market and crude oil rebound
Tuesday 20 August, 2019
Daily Currency UpdateCAD - Canadian DollarThe Loonie traded flat this morning, and the USD/CAD pair is still trading at higher levels than in the last month, mostly due to weakness in global equity markets and crude oil. It is important to highlight that, at this time, the USD/CAD is trading around the 200 moving average of 1.3304. With the stock market and crude oil going higher this morning, and volatility contracting, we don’t expect that the USD/CAD pair goes much higher today. Therefore, technically speaking, 1.3315 and 1.3335 are key resistance levels. On the other side, 1.3286 and 1.3266 are critical support levels, which if broken, can make the USD/CAD pair test the 1.3250 level. According to Bloomberg regarding crude oil, the saga of an Iranian oil tanker caught in a spat between the U.S. and the U.K., the trade war headlines, rising stockpiles, and weakening global demand have all attacked the commodity.
Key MoversWith a lack of important FX-related news in Europe and Asia, market participants are watching the Fed at the end of a rough week in the FX markets. The debate continues over whether the inversion of the yield curve signals recession. St. Louis Fed President James Bullard calmed market participants on speculation that the central bank would call an emergency gathering ahead of the Sept. 17-18 meeting. Furthermore, Chairman Powell may shed some light on how he is evaluating the U.S. economy at Jackson Hole next week. He might potentially say, “I told you so,” as solid data rolls in. Also, the minutes of the July policy meeting will be released on Wednesday at 2:00 pm next week, and they will shed some light into last month’s decision to cut rates for the first time since the financial crisis in 2008.
- USD/CAD: 1.3283 - 1.3315 ▼
- EUR/CAD: 1.4688 - 1.4775 ▼
- GBP/CAD: 1.6119 - 1.6205 ▲
- AUD/CAD: 0.8994 - 0.9058 ▼
- NZD/CAD: 0.8500 - 0.8573 ▼