USD remains calm with eyes fixed on inflation rates

The greenback seemed to be rather downbeat yesterday, as there was little volatility in the markets, with the US stockmarkets investors providing little change, while gold’s price edged slightly lower. Investors seem to be focusing on the key US inflation rates due out on Thursday as the prospect of a possible tapering of the Fed’s QE program drifts further away after a disappointing jobs release for May on Friday and actual tapering may start early next year so practically expectations for some tightening of the Fed’s monetary policy were pushed for a later stage. May’s US employment report seems to continue to unnerve the markets as it showed U.S. non-farm payrolls failing to meet market expectations. Volatility seems to remain low and given that no major US financial releases are expected fundamentals could take the lead.
USD/CAD tested the 1.2060 (S1) support line without much success and maintained a sideways motion yesterday. We tend to keep our bias for a sideways motion between the 1.2140 (R1) resistance line and the 1.2060 (S1) support line. Also please note that the RSI indicator below our 4-hour chart remains near the reading of 50, implying a rather indecisive market. Should a selling interest be displayed by the market, we may see the pair breaking the 1.2060 (S1) support line and aim for the 1.1995 (S2) support level. Should the buyers be in charge of the pair’s direction, we may see the pair breaking the 1.2149 (R1) resistance line and aim for the 1.2230 (R2) level.

Oil prices retreat on demand doubts

Oil prices tended to retreat yesterday as worries about the fragile situation regarding the recovery of global demand for oil increased. It should be noted that India’s demand was hit, given the path of the pandemic in the country while China’s crude imports were considerably down in May as maintenance at refineries tends to limit capacity, thus inputs of crude oil, yet the latter could be considered as temporary. On a note of optimism, the OPEC+ group seems to expect oil inventories to drop further in the near future as OPEC’s secretary general said on Monday, suggesting efforts by the producers to support the market are succeeding, according to Reuters. Overall, should doubts about the rebound of future demand increase we may see oil prices retreating further while the API inventories figure is to be closely watched later today by oil traders.
WTI prices retreated yesterday, after testing the 69.80 (R1) resistance line. As the commodity’s price-action retreated lower it also broke the upward trendline incepted since the 21st of May, hence we switch our bullish outlook in favour of a bias for a sideways motion initially. Also please note that the RSI indicator below our 4-hour chart runs along the reading of 50, as the market still hasn’t decided on the direction of the next leg for the commodity’s prices. Should the bulls regain control of the commodity’s direction, we may see WTI’s price breaking the 69.80 (R1) resistance line and aim for the 71.70 (R2) resistance level. Should the bears take over, we could see WTI’s prices breaking the 67.75 (S1) support line and aim for the 65.40 (S2) support level.

Other economic highlights today and the following Asian session:

Today during the European session, we get Germany’s industrial output growth rate for April as well as the ZEW Economic Sentiment and Current Conditions indicators for June while we also get Eurozone’s revised GDP rate for Q1. Please note that during the European session from Japan BoJ Deputy Governor Amamiya is scheduled to speak. In the American session, we get Canada’s trade data for April and just before the Asian session starts oil traders maybe interested in the release of the API weekly crude oil inventories figure. During Wednesday’s Asian session, we get from Australia June’s consumer sentiment and from China the PPI and CPI growth rates for May. Also please note that during Wednesday’s Asian session, RBA assistant governor Kent is scheduled to speak.

USD/CAD H4 Chart

Support: 1.2060 (S1), 1.1995 (S2), 1.1920 (S3)

Resistance: 1.2140 (R1), 1.2230 (R2), 1.2320 (R3)

WTI H4 Chart

Support: 67.75 (S1), 65.40 (S2), 63.00 (S3)

Resistance: 69.80 (R1), 71.70 (R2), 73.40 (R3)

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