- USD/CAD remains sidelined after rising the most in a week and snapping three-day downtrend.
- Oil price slumps to five-week low on risk aversion, API inventories.
- US ADP Employment Change, ISM Services PMI can entertain traders ahead of FOMC.
- Loonie sellers seek Fed’s policy pivot hints to retake control as 0.25% rate hike is almost given.
USD/CAD seesaws around 1.3625-30 during the initial hours of Wednesday’s Asian trading session, following the heaviest daily jump in a week, as traders await the key US data/events. That said, the Loonie pair cheered a slump in the WTI crude oil prices, Canada’s main exports, together with the risk-off mood, the previous day.
WTI crude oil remains depressed at the lowest levels in five weeks, licking its wounds near $71.50 by the press time, amid a generally lackluster early trading session of the day. The energy benchmark dropped the most in eight months the previous day as the market’s fears from banking fallouts and hawkish central bank actions joined the slower-than-previous draw of the weekly Oil inventories per the industry report. That said, the American Petroleum Institute (API) said that the Weekly Crude Oil Stock declined by -3.939M during the week ended on April 28 versus -6.083M prior.
Talking about the risks, fresh selling of PacWest Bancorp and Western Alliance Bancorp shares triggered banking fears across the board and put a floor under the US Dollar price, especially amid hawkish Fed bets. However, mixed US data and softer US Treasury bond yields prod the greenback buyers ahead of the key US factors up for publishing.
On the other hand, the US Dollar Index (DXY) initially rushed to refresh a three-week high before retreating to 102.00 amid mixed US data. That said, US Factory Orders for March improved to 0.9% versus 0.8% expected and -1.1% (revised) previous readings. Elsewhere, the US JOLTS Job Openings for the said month eased to 9.59M from 9.974M prior and 9.775M market forecasts.
Against this backdrop, Wall Street closed in the red and the US Treasury bond yields also dropped. On the same line, S&P 500 Futures also print mild losses at the latest.
Moving on, the US ADP Employment Change for April and the ISM Services PMI for the said month can entertain USD/CAD traders. However, major attention will be given to the Federal Reserve (Fed) announcements and the banking headlines for clear guidance.
Also read: FOMC Meeting Preview: Powell to keep every door open, surprises not out of the table after RBA
Technical analysis
USD/CAD remains on the bull’s radar as it bounced off the 100-DMA support of around 1.3525 by the press time, suggesting another attempt to cross the key resistance line from early March, near 1.3635 at the latest.
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