USDCAD posts a major rebound amid Crude selloff

Crude drops over 7% putting pressure on the Loonie: Chart

Energy 5

The US Dollar was bullish against most of its major pairs on Tuesday with the exception of the JPY. On the US economic data front, no major economic data was released.  

On Wednesday, the Mortgage Bankers Association's Mortgage Applications data for the week ending September 4th is expected. Finally, US Job Openings for July are expected to increase to 6,000 on month, from 5,889 in June.  

The Euro was bullish against most of its major pairs with the exception of the CHF, JPY and USD. In Europe, the European Commission has reported final readings of 2Q GDP at -11.8% (vs -12.1% on quarter expected). The German Federal Statistical Office has posted July trade balance at 19.2 billion euros surplus (vs 16 billion euros surplus expected). France's INSEE has released July trade balance at 6.99 billion euros deficit, vs 4.8 billion euros deficit expected.

The Australian dollar was bearish against most of its major pairs with the exception of the NZD, CAD and GBP.

USD/CAD was the largest gainer on the day after jumping 127 pips to 1.3225 after WTI Crude prices tumbled $2.86 (-7.19%) to $36.91 in Tuesday's trading. Looking at the chart, an important breakout might be taking place. 

Support has been identified at the 1.3035 area. The pair is attempting to break above a long term bearish channel in place since March after breaking above its 20-day moving average (in red). As long as price action remains above the bearish trend line, look towards the 50-day moving average as a target near the 1.3505 level which could signal the start of a major rebound to the upside. 

Source: GAIN Capital, TradingView

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