Yahoo Finance USD/CAD Daily Price Forecast – USD/CAD Back on Track to Breach 1.32 Handle
The USD/CAD pair finally broke out of its Asian session consolidation phase, with bulls now eyeing a move back above the 1.3200 handle. After yesterday’s modest retracement 1-1/2 week tops, the pair regained positive traction on Friday and was being supported by persistent US Dollar buying interest. Against the backdrop of easing US-China trade tensions, firming Fed rate hike prospects continued underpinning the greenback and was seen as one of the key factors driving the pair higher. This coupled with a mildly negative trading sentiment around oil markets, with WTI crude oil just managing to hold its neck above the $70.00/barrel markets, was further seen weighing on the commodity-linked currency – Loonie and remained supportive of the up-move.
USDCAD On the Move
It however remains to be seen if the pair is able to maintain their dominant position or the 1.3220-25 supply zone continues to act as an immediate strong barrier in absence of any major market moving economic releases on the last trading day of the week. The dollar maintained gains made on Wednesday against most major currencies thanks in part to a report of U.S. consumer prices on Thursday which showed a steady buildup of inflation pressure that could keep the Federal Reserve on a path of gradual interest rate increases. Following Wednesday’s report that U.S. producer prices rose in June, leading to the biggest annual increase in 6-1/2 years. Economic data for Q1 and Possibility of Q2 data remaining positive on broader spectrum has underpinned the dollar’s recent strength.
Crude Oil outage in Canada continues to weigh down the pair significantly as Loonie is a commodity linked currency with major support derived from Crude oil price action in international trade. Moving forward the pair’s momentum for majority of the week is expected to come from US dollar on relatively silent Canadian calendar schedule. Major news for Loonie comes next Friday on release of Core CPI & Core Retail Sales data. Momentum beyond the mentioned barrier of 1.3220-25 is likely to get extended towards 1.3265 horizontal resistances before the pair eventually aims to reclaim the 1.3300 handle. On the flip side, mid-1.3100s now seems to have emerged as an immediate support, which if broken might prompt some additional weakness towards 1.3130 intermediate support en-route the 1.3100 round figure mark.
This article was originally posted on FX Empire
