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USD/CAD Daily Price Forecast – Spike in Crude Oil Price Drags Price Action Below Mid 1.32 Handle

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The USDCAD pair yesterday saw positive price action despite a clear lack of high impact macro data updates. The upside move of the pair was supported by Dollar bulls which gained positive influence from the sharp boost in 10-year bond yields which went up nearly 1% during U.S. trading session. Further, news that U.S. lawmakers managed to come to a deal on President Donald Trump’s demands for funds to build a border wall between U.S. & Mexico inspired a high level of the upside move. This news was viewed by investors across the globe as a sign that U.S. government will not see another shutdown which greatly improved U.S. economic outlook giving U.S. Greenback significant level of fundamental support.

Positive U.S. Dollar Prevents Further Downside Movement

While the positive price action continued across early Asian market hours, the price action slowly took a dovish turn as profit booking activities saw US Dollar move down in the global market. Further news that Saudi Arabia the world’s largest manufacturer of crude oil plans to reduce crude oil production by 9.8 million barrels per day in March 2018 and reports of shutdown of TransCanada’s Keystone pipeline bringing Crude oil from Steele City, Nebraska, to Patoka, Illinois over news of the discovery of a leak in the St. Louis helped crude oil price gain by more than 1.5% during European market hours. Canadian Loonie being a commodity-linked currency gained positive price action once Crude oil gained in a broad market.

This caused to the pair to fall below 1.33 handle and move well below mid 1.32 handle post which it has entered into consolidative price action. As of writing this article, USDCAD pair is flat trading at 1.3249 down by 0.44% on the day well near the mid-1.32 handle. Moving forward, investors await macro data updates for meaningful trading opportunities.  While Canadian economic calendar remains silent for the day, U.S. macro calendar sees the release of JOLTs Job Openings data along with a speech by Fed Chair Jerome Powell which is expected to provide the impetus for short term price action and likely to influence USD’s price action for rest of the week. Expected support and resistance for the pair are at 1.3240, 1.3229, 1.3165 and 1.3264, 1.3272, 1.3287 respectively.

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This article was originally posted on FX Empire

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