USDCAD continues south for the third consecutive session as the rally in crude oil price continues to rise after the physical demand for crude oil increases amid the reopening in businesses across the globe. WTI Crude oil is 2.82% higher at 32.95 per barrel.
The Canadian dollar also supported by better economic data. The Canada Wholesale Sales came in at -2.2% (63.9 billion) beating the expectations of -3.8% in March. The Consumer Price Index (CPI) register in at -0.7% below the expectations of -0.6% in April; the yearly CPI came in at -0.2% below the expectations of -0.1%.
From the U.S earlier today, the MBA Mortgage Applications came down to -2.6% for May 15, the previous reading was at 0.3%. Yesterday, the U.S. housing starts and building permits dropped in April to the lowest levels since 2015. The Housing Starts came down -30.2% in April. The Building Permits Change came down to -20.8% in April from -6.8% in March.
In an interview, the Dallas Fed President Robert Kaplan said that the Federal Reserve would need to do more to help the economy and the government will need more fiscal action. He also said that the unemployment rate is expected to hit 20%.
The USDCAD is 0.47% lower at 1.3876, making fresh three week lows as the correction gains steam below the 50-day moving average. Now the short term picture is bearish as the pair trades below the 50-day moving average. However, the long term picture remains bullish as the pair trade above the 100-day moving average.
On the downside, initial support for USDCAD stands at 1.3867 the daily low. If the pair breaks below 1.3867, the next support for USDCAD will be met at 1.3847 the low from April 30. The next target for bears is at 1.3726 the low from March 16 trading session.
On the contrary, the immediate resistance for the USDCAD pair stands at 1.3960 the daily high. If the pair breaks higher, the next obstacle will be met at 1.4081 the 50-day moving average. In case the bullish momentum persists, the next resistance stands at 1.4141 the high from May 14.