Usdcad Turns Lower Intraday

last updated on

Usdcad Turns Lower Intraday

Usd/Cad Turns Lower Towards 1.3800, Usd Gives Up Intraday Gains

The USD/CAD pair has once again turned lower after staging a short pullback towards the 1.3837. For now, it seems that the USD/CAD pair is back to its bearish trend amid weakness in the US Dollar.

If we take a closer look at the USD/CAD, it seems that the US Dollar has ended up surrendering most of its intraday gains. As a result, the Canadian Dollar has taken advantage of this situation and pushed the USD/CAD pair lower.

Q2 Unit Labor Costs Shows A Decline

The recent weakness in the US Dollar comes amid a decline in the Q2 unit labor costs along with the ISM manufacturing PMI for the month of July. The data showed that the Unit Labor Cost has declined to around 0.9% in July against the forecasts of 1.8%.

Similarly, the US manufacturing PMI also showed a change from 48.5 to around 46.8 in July. The economists were expecting the manufacturing PMI to be near 48.8 but the data showed a fast contraction.

Meanwhile, the CAD has advanced higher amid a recovery seen in crude oil prices. The WTI is up by 4.5% which shows a rather strong recovery in the oil prices. It is also important to note that Canada remains one of the top oil exporters for the USA. So, any appreciation in the oil prices also helps the Canadian Dollar.

However, it would be too soon to classify this move as a bearish reversal as the USD/CAD is still trading above the 20 EMA, which is present at 1.3760. The RSI (14-period) also hovers in the 60 - 80 range, which shows that the US dollar bulls are still in the picture.

If the USD/CAD can manage to break above 1.3865, it would provide a fresh buying opportunity for the US Dollar bulls. In that case, the path of least resistance for the USD/CAD would be the 1.3978 level which is the high from October 2022.

Trending Stories