The Canadian Dollar today - USD/CAD responds positively to the US Dollar's decline from weekly highs amid weak oil prices in Europe on Thursday morning. The Loonie currency pair has dropped for the fourth consecutive day, reaching around 1.3145 at the time of writing, after previously recording a weekly low of 1.3133. This quote has consolidated after bouncing back on Friday from its lowest level since September 2022.

Meanwhile, the US Dollar Index (DXY) has decreased by 0.25% intraday, attempting to return to the round 100.00 level after rebounding for two days from its lowest point since April 2022. This is due to disappointing US housing data and concerns regarding the US central bank (The Fed) policy, affecting the performance of the US Dollar. Despite this, optimism among US banks seems to be disregarded by the greenback at the moment.

US Building Permits for June showed a contraction of 3.7%, in contrast to the previous increase of 5.6% (revised). Meanwhile, Housing Starts also dropped by 8.0% for the period, compared to a prior increase of 15.7% (revised).

Although US Retail Sales grew more slowly in June, this contrasts with several promising indicators that would encourage the Federal Reserve to keep interest rates higher for a longer period. Additionally, the announcement of a 0.25% rate hike in July has also played a role in this situation.

As a result, this movement caused the US Dollar to experience a correction upwards from its 15-month low on Tuesday, helping to sustain its recovery on Wednesday before experiencing another decline.

Meanwhile, WTI crude oil prices remain uncertain, hovering around $75.40, as they struggle to find clear direction after falling from weekly highs. The recent decline in oil prices can be attributed to two factors: lower-than-expected inventory withdrawals and the weakening US Dollar.

On the other hand, new concerns regarding the US-China dispute have also affected the decline in the USD/CAD currency pair lately. This dispute stems from comments by Chinese diplomats and actions by the US House of Representatives related to outbound investment and artificial intelligence chip technology. All of this seems to be impacting the USD/CAD exchange rate in the recent period.

It's important to note that there are various concerns about the Federal Reserve's (Fed) policies in 2023, even though the July rate hike has been confirmed. This contrasts with the Bank of Canada's (BoC) hawkish stance, which could influence bearish expectations for USD/CAD.

Looking ahead, employment and housing sector data from the US and Canada may provide support for intraday traders trading the USD/CAD currency pair, especially with the upcoming Canadian Retail Sales data on Friday and next week's key Federal Reserve monetary policy meeting. It is expected that major news related to Fed policies and developments in China will also influence the short-term movement of this Loonie currency pair, so close monitoring is necessary.

Despite the recent decline in the USD/CAD pair, a bullish triangle pattern has formed over the last three weeks, with a range between 1.3110 and 1.3205. This pattern challenges selling action, as the Relative Strength Index (RSI) remains stable and the MACD signal is slow.

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Warning!

This analysis is based on the fundamental and technical perspectives from trusted sources, and is not intended as advice or a recommendation. Always remember that this content aims to enrich the reader's information. Always conduct your own research first regarding other forex information to use as a reference in your trading.. 

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