Article by ForexTime
USD/CAD has moved back toward resistance near 1.3270, in the wake of declining oil prices which dropped more than 8% on Tuesday and continues to fall on Wednesday following a stronger than expected build in API crude oil inventories. On Monday, the USD/CAD tumbled to 1.3117 from near 1.3200 following the negative, but better than expected Canadian Q2 GDP outcome. Monday’s 1.3118 low seen late in the session provides initial support, though corporate bidding interest is noted into 1.3100.
Speculative accounts have increased net short Canadian dollar exposure according to the latest commitment of traders report. In the CFTC data, speculative accounts were net short -44k contracts, having swung from net long 7k at the end of May, eclipsing the net short -39k position seen in March.
A full scale tug of war is being waged as prices continue to chop around the 1.32 region. The break down in crude oi land a revisit of the lows near $37, will likely push the USD/CAD back up to the 1.3350 level. Support on the currency pair is seen near the 20-day moving average at 1.3150. Momentum is flat with the MACD printing near the zero index which reflects the current consolidation.
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