USD/CAD Daily Price Forecast – USD/CAD on Sharp Upside Move As USD Rebounds
The USDCAD pair yesterday saw sharp downside move as USD remained week owing to decline in US Treasury Yield for long term government bond while disappointing macro data outcome in the US also added more bearish pressure to US Greenback. Meanwhile, consecutive trading sessions of positive crude oil price hinted at positive fundamentals in the crude oil market. Canadian Loonie being a commodity-linked currency gains momentum when Crude oil price trades positive in the broad market. Given the lack of macro data updates in Canadian macro calendar, the strength of US greenback in the global market and crude oil price in global markets were the main driving force of price action for USDCAD pair.
Sino-U.S. Trade Deal Related Headlines Underpin USD Bulls
The USD Greenback rebound in the broad market and slowly gained strength across the day as US Treasury Yields spiked during Pacific-Asian market hours. Meanwhile, Crude oil price also hit new 2019 highs in Pacific-Asian trading session as supply disruption influenced by the sudden outage in Venezuela and Saudi Arabia’s target lower production and output than the agreed target provided fundamental support to crude oil. However, crude oil price fell later in the day as the influence unexpected increase in EIA weekly crude oil stockpile hit the market. Given sudden draw in API weekly data released earlier this week, the sudden increase in latest stockpile data has a significant impact on crude oil price action resulting in declines from intra-day highs.
Further, cautious mood increased in European market hours as news hit the market that China was planning on delaying face to face meeting between Presidents of both nations which was scheduled to occur later this month to April. Meanwhile, US President Donald Trump also commented in a manner which was in contrast to his speech last month hinting that there is no urgency to close trade deal immediately, while US trade representative Robert Lighthizer commented that key issues between both nations still need to be resolved which suggests that things may not have seen much progress and increased caution among global investors. This added more bearish pressure to the Canadian Dollar resulting in USDCAD pair seeing sharp upside move ahead of US market hours. On the release front, Canadian calendar will see the release of new housing price index data while the US calendar sees the release of new home sales data and import and export price index data updates. Given the cautious investor sentiment following Sino-U.S. trade talk headlines, USD bulls are expected to dominate price action for the rest of today’s trading session.
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This article was originally posted on FX Empire
