USDCAD Gains Momentum for a Break Above 1.31

USDCAD trades 0.26 percent higher at 1.3091 in positive momentum, after Canada May wholesale trade sales came in at -1.8% worse than expectations of +0.5% making the largest drop in more than 3 years. Meanwhile the Chicago Fed National activity index for June 2019 fell by -0.02%, while the expectations was for 0.10%. The 36 indicators out of 85 improved, while the 49 indicators fell.  The Bank of Canada kept rates unchanged the previous week at 1.75% as widely expected by markets. USDCAD hit fresh 9 month lows at 1.3017 amid USD weakness across the board as markets discount a 25 basis point cut by FED at the end of the month policy meeting. The Loonie also gets a lift today by stronger crude oil which now trades 1.00% higher at $56.15. On the other hand traders now looking for a 25 basis point cut from Fed in its July meeting, lower than the 50 bp scenario that was running the previous week after Fed member Williams comments.

Bulls took control in the short term as the pair trading above all major hourly moving averages. First support stands at 1.3039 the daily low and then at 1.30 round figure. Immediate resistance for the pair stands at 1.3097 the daily high, and then at 1.3109 the high from Friday, while a break above might trigger some aggressive buying, sending the pair to the next resistance at 1.3195 the high from June 26th. The pair needs to make a convincing rebound above 1.31 otherwise the sellers will make an attempt for new yearly lows.Don’t miss a beat! Follow us on Twitter.