USD/CAD snaps two-day uptrend as WTI rallies on geopolitical risks. US dollar eases ahead of Fed Chair Jerome Powell’s speech. Downside opens up below 50-SMA on the 4H chart. The rebound in USD/CAD seems to have lost legs on Friday, as it eases below 1.2700, having hit four-day highs of 1.2708 earlier in the Asian session.
The retracement comes on the back of a pause in the US dollar’s advance, as markets turn nervous ahead of the all-important Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium.
Also, investors digest the latest news of Kabul airport bombings and refrain from placing any fresh bets on the currency pair. On the other hand, the rally in WTI price amid escalating geopolitical tensions over Afghanistan rescue to the CAD bulls, weighing negatively on the pair. WTI is rising 1.56% on the day, currently trading around $68.50.
Apart from Powell’s speech, US PCE Inflation and Canada’s second-tier Industrial material prices will be eyed. Although, the US central bank’s Chief’s hints on the policy guidance will hold the key this Friday. The four-hour chart shows that USD/CAD has failed to maintain its grip above the upward-pointing 50-Simple Moving Average (DMA) at 1.2689. The price is now heading south for a test of the horizontal 21-SMA at 1.2630.
The Relative Strength Index (RSI) points south, but holds well above the midline, raising skepticism over the latest down move. On the flip side, the bulls need to take out daily highs to unleash further recovery towards the 1.2750 psychological levels.