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USD/CAD price action under pressure as crude oil aims higher despite coronavirus second wave risk

  • USD/CAD pivots lower after finding resistance around the 1.3600 price level
  • Canadian Dollar gains ground as crude oil prices press higher amid pent-up demand
  • Spot USD/CAD eyes Markit PMI data on deck and coronavirus second wave risk

The Canadian Dollar (CAD) is trading on its front foot against major FX peers like the US Dollar (USD) and Japanese Yen (JPY) so far for Monday’s session. In fact, spot USD/CAD price action has dropped by about 75-pips, or 0.5% since Friday’s close.

Canadian Dollar buying pressure seems to correspond with climbing crude oil prices. This likely follows draining storages amid pent-up demand as the global economy reopens from the recent coronavirus lockdown.

Typically speaking, there is a strong inverse correlation between the direction of crude oil and USD/CAD price action. That said, with crude oil prices trading back above $40.00 per barrel, there is potential for spot USD/CAD to target month-to-date lows. On the other hand, as crude oil hits resistance around its current level, Canadian Dollar bulls might lack motivation to make a sustained push in the absence of crude oil follow-through.

https://www.dailyfx.com/forex/market_alert/2020/06/22/usdcad-usd-cad-price-outlook-canadian-dollar-climbs-with-crude-oil.html

USD/CAD

Trading Central’s (3rd party RIA) preference is for short positions below 1.3550 with targets at 1.3495 & 1.3480 in extension.

* Past performance is not a guarantee of future

https://europefx.tradingcentral.com/Product?PK_ANALYSE=10794350

Number of Lots:Required Margin:Risk Management (50%):Potential Profit/Loss 1.3495
12959.281479.64281.74
514796.4029592.801408.68
1029592.8059185.612817.36
2573982.01147964.027043.40
50147964.02295928.0314086.80



GBP/USD drops back below 1.2500 ahead of UK/US PMI

GBP/USD fails to justify the U-turn from 1.2437. Worries over UK-Japan trade deal joins Brexit pessimism to heavy the Pound. US-China trade deal concerns, virus news favor the greenback. The focus shifts to UK Preliminary PMIs for June.

The multidirectional news concerning the Sino-American trade relations recently entertained the market players. However, downbeat concerns relating to the UK’s efforts to tie-up with Japan and the European Union (EU) during the post-Brexit period seem to weigh on the quote. Even so, the pair traders are waiting for the key preliminary activity numbers from Britain and the US for fresh impulse.

Financial Times came out with the news that Japan wanted to rush through the trade deal with the UK and gave a six-week deadline. This exerts additional pressure on the British diplomats who are already struggling to break the Brexit deadlock. On the other hand, policymakers from the UK and the EU will fasten weekly Brexit talks to aim for a deal before the autumn. However, the UK Express cited a set of draft European Council conclusions to be adopted this week while saying, “capitals welcomed the UK and EU’s pledge to intensify efforts to reach an agreement this summer. But they will warn businesses and EU institutions that they should also ramp up preparations for a new trading relationship with Britain – including a no-deal.”

Elsewhere, the coronavirus cases from the UK have reached to the pre-lockdown period while rising 958 as per the latest update from the BBC. Furthermore, the Beijing-Britain tussle continues on the Hong Kong issue but developing trade ties with the EU and Japan seems to be the Tory government’s immediate agenda.

https://www.fxstreet.com/currencies/gbpusd

GBP/USD

Trading Central’s (3rd party RIA) preference is for long positions above 1.2455 with targets at 1.2505 & 1.2530 in extension.

* Past performance is not a guarantee of future

https://europefx.tradingcentral.com/Product?PK_ANALYSE=10794311

Number of Lots:Required Margin:Risk Management (50%):Potential Profit/Loss 1.2505
13685.681842.84452.62
518428.4236856.852263.12
1036856.8573713.704526.25
2592142.12184284.2411315.62
50184284.24368568.4822631.25