USD/CAD is currently stagnant
The USD/CAD pair struggles and stays at a distance of multi-year lows, around a key 1.20000 psychological level touched last week. Weaker NFP results on Friday eased market expectations that the Fed could start reducing asset purchases sooner rather than later. Investors remain concerned about rising inflationary pressures. A softer tone around the stock market and a smaller decline have prompted some investors to find refuge in the dollar.
On the other hand, due to the withdrawal of crude oil prices, she undermined the CAD currency associated with the goods. Oil prices recorded excellent earnings coinciding with October 2018 amid prospects for higher Iranian exports. Therefore, the focus will be on the new set of negotiations between Iran and global powers over the nuclear agreement, starting on Thursday in Vienna.
Meanwhile, traders will refrain from any aggressive and premature investments, preferring to wait on the sidelines ahead of this week’s crucial event. The Bank of Canada is due to announce its latest monetary policy decision on Wednesday, whether to keep interest rates at the same level or see some change. This, along with the latest U.S. consumer inflation on Thursday, will provide greater USD/CAD pair movement.
The broader sentiment of market risk and yields on U.S. bonds will continue to play a key role in the impact on the U.S. dollar. Traders could take further signs from oil price movements to take advantage of some short-term opportunities amid relatively thin economic headlines on Tuesday, including the release of U.S. and Canadian trade balance data later in the North American session.
Looking chart on the daily time frame shows that the USD/CAD pair has been consolidating a little over 1.20000 for a month. For the potential bullish option, we are waiting for a break above the moving averages of MA20 and EMA20 to have a safer signal for further growth of the USD/CAD pair. We need a jump above 1.21500 and consolidation at that level as support moves beyond 1.20000. Looking at the MACD indicator, we have a bearish signal even though we are still in the bearish zone.
