Loonie Gains Following Dollar Retreat, Oil Support

Fundamental Analysis

* Buck Backslide: The Canadian Loonie continues to gain strength against the US Dollar, which is experiencing a slight decline due to profit-taking in the absence of significant fundamental drivers. With limited new information for investors to consider, market sentiment is currently aimless as attention turns to forthcoming data for direction. Additionally, the Loonie is supported by rising crude oil prices, driven by renewed optimism for increased fuel demand in the summer. This is particularly beneficial for Canada, a leading crude oil exporter to the U.S.

Technical Analysis

* Technical Breakout: USDCAD was traded lower following prior breakout below the previous support level 1.36650. MACD which illustrate ongoing bearish momentum signal suggest the pair to further extend its losses.

* Resistance and Support: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards 1.36050. Conversely, a potential correction is also to be expected and the price could head back towards 1.37250 after it breaks back above the level 1.36650.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

Looking ahead, Canada is set to release an update on the Consumer Price Index (CPI) inflation on Tuesday. Besides Friday’s upcoming Canadian Gross Domestic Product (GDP) report, the week’s schedule is relatively light, with only a Monday appearance from Bank of Canada (BoC) Governor Tiff Macklem. USD traders will also have to wait until Friday for the US Durable Goods Orders and the US Personal Consumption Expenditures (PCE) Price Index reports.

Know how to manage trading risks with risk management strategies.

Monitoring

: Stay updated on US and Canada data, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.