USD/CAD has extended gains from the previous session ahead of the weekly US oil inventories data and OPEC+ meeting. At the time of writing, WTI futures were down by 0.32% at 72.68. In the previous session, the benchmark for US oil hit an intraday high of 74.43 before plunging.
As a key commodity currency whose most oil exports are to the US, the Canadian dollar thrives on increased oil demand and prices. The American Petroleum Institute (API) is set to release its figures late on Wednesday while the Energy Information Administration (EIA) will have its data up on Wednesday. The OPEC+ meeting is scheduled on Thursday and will focus on the coalition’s output policy for August.
In the previous release, API’s data came in better-than-expected at -7.199 million barrels compared to the forecasted draw of 3.625 million barrels. EIA confirmed the trend by highlighting that crude oil inventories had declined by 7.614 million barrels. For the week that ended on 25th June, analysts expect oil stockpiles to have dropped by 4.460 million barrels.
USD/CAD will also be reacting to the US CB consumer confidence data later in the day. The numbers will offer investors some guidance on where interest rates are expected next. The expected reading of 119.0 is higher than the prior month’s 117.2. A higher-than-expected figure is likely to be bullish for the currency pair.
USDCAD technical outlook
USD/CAD is trading higher by 0.02% at 1.2340. It is consolidating after rising in the previous session. On a two-hour chart, it is trading above the 25 and 50-day EMAs. I expect the pair to whipsaw at its current level ahead of the US consumer confidence data and oil inventory figures. Its current support level is along the 25-day EMA at 1.2325. A move below that point will place the support level at 1.2300. On the other hand, bullish outcomes from today’s events may push the pair higher to 1.2385 and further to 1.2400.
USD/CAD price chart
Follow Faith on Twitter.