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USD/CAD Daily Price Forecast – USD/CAD Stable above 1.30 Handle Ahead of Canadian GDP Data

Colin First

The USD/CAD saw some fresh market tensions in early Asian market hours as NAFTA headlines continued to cross the wires restraining the pair near 1.3035 following a hawkish speech from the Bank of Canada’s Poloz. The USD/CAD peaked at 1.3080 in Thursday’s action, with the Greenback pushing higher after US GDP and consumption figures came in as expected or better, but a healthy mix of positive and negative readings across the US’ fairly large data dump for Thursday kept the USD from extending too far on either side. As of writing this article, the USDCAD pair is trading at 1.3016 down by 0.21% on the day. The USD/CAD pair extended overnight retracement slide from over two-week tops and traded with a negative bias through the mid-European session.

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Currently trading around the 1.3016 region, just a few pips off session lows touched in the last hour, the pair has now erased all of its gains recovered in the previous session. Against the backdrop of a subdued US Dollar price action, a combination of factors underpinned the Canadian Dollar and exerted some fresh downward pressure on Friday. Speaking at the Atlantic Provinces Economic Council dinner, the BOC Governor Poloz indicated that the central bank is set to raise interest rates in October despite the prevalent uncertainties surrounding the North American Free Trade Agreement (NAFTA).Adding to this, the recent bullish run in crude oil prices continued underpinning the commodity-linked currency Loonie and further collaborated to the pair’s weaker tone on the last trading day of the week.

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Moreover, investors also seemed inclined to lighten their bullish positions ahead of today’s important release of the monthly Canadian GDP growth figures. This coupled with second-tier US economic data should produce some meaningful trading opportunities during the early North-American session. Immediate resistance is now pegged near the 1.3030 region and is closely followed by mid-1.3000s, above which the pair is likely to dart towards reclaiming the 1.3100 handle. On the flip side, a follow-through weakness below the key 1.30 psychological mark is likely to accelerate the fall towards 1.2975-70 horizontal support en-route to the 1.2955-50 region.

This article was originally posted on FX Empire

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