The USD/CAD advances slightly in the middle of oil bearish prices although it remains below 1,3800

• The USD/CAD advances slightly in the middle of a combination of support factors, although it lacks bullish conviction.
• A drop in oil prices weakens to CAD and offers support to the torque in the middle of a modest rebound of the USD.
• The operators seem reluctant and choose to wait for the key macroeconomic publications of the United States before opening directional positions.

The USD/CAD pair extends its lateral consolidation price movement during the first half of the European session on Wednesday and remains confined in a family range maintained during the last two weeks. Cash prices are currently negotiated around the region of 1,3835-1.3840 and seem to receive support from a combination of factors.

Crude oil prices fall to a minimum of almost three weeks amid concerns that a total commercial war could trigger a global recession and affect fuel demand. In addition, several members of Opec+ supposedly suggest an acceleration of production increases per second consecutive month in June. This adds concerns about the increase in supply and exerts additional pressure on the decline on the black liquid, which, in turn, is considered to weaken the CAD linked to raw materials. Apart from this, a modest rebound of the US dollar (USD) acts as a tail wind for the USD/CAD torque.

Meanwhile, the USD rebound lacks an obvious fundamental catalyst and could be attributed to a certain repositioning trade before the key macroeconomic data of the United States, in the middle of the end of the month flow. However, the prospects for a more aggressive policy relief by the Federal Reserve (FED), reinforced by the disappointing economic publications of the US of Tuesday, could stop the USD bulls when opening new positions. In addition, the erratic commercial policies of US President Donald Trump led to a massive change away from American assets recently, which should limit the USD/CAD to the dollar and torque.

The Canadian dollar (CAD), on the other hand, continues to receive support from the victory of the Liberal Party in the Canadian federal elections, which strengthens the position of the Mark Carney in functions in the commercial negotiations with the US with the US. The operators now expect the key macroeconomic publications of the US – the ADP report on employment in the private sector, the anticipated publication of the GDP of the first quarter and the price index of the expense in personal consumption (PCE).

Wednesday’s economic agenda also includes the public GDP publication of Canada, which, together with the dynamics of oil prices, should influence CAD and provide some impulse to the USD/CAD torque later during the early American session. However, the aforementioned mixed fundamental background justifies some caution before opening aggressive directional positions around the pair of foreign exchange.