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USD/CAD Daily Price Forecast – USD/CAD on Roller Coaster Ride over Macro Data & Crude Oil Price Action

Colin First

The USDCAD pair hit a 7 week high last night saw both sides of pair wage war over control for momentum as an upbeat Canadian GDP data pushed the pair well near 1.3100 handle while similarly upbeat data from US ADP employment update was better than expected which combined with weakness surrounding crude oil price in global market resulted in the pair touching 7-week highs during north American market hours. Earlier yesterday, Statistics Canada reported that the Canadian economy expanded 0.1% on a monthly basis in August to beat the analysts’ estimate of 0%. On a negative note, the raw material price index in Canada declined by 0.9% in September. However the broad-based USD strength didn’t allow the pair to gather bearish momentum on Canadian GDP update. The US Dollar Index, which tracks the greenback against a basket of six major currencies, surged to its highest level of the year at 97.20 after the monthly ADP report that the private sector employment increased by 227K from September to October to surpass the market consensus of 189K.

Macro Data Update from Both Sides of Pair Helps Maintain High Level of Volatility in Price Action

However the pair lost all overnight gains during Asian and European market hours today as risk appetite saw major global currencies pick up momentum in broad market, while profit booking and broad based subdued demand for USD post dollar index falling from 16-month high resulted in the pair falling well below 1.3100 handle and touching an intra-day low of 1.30957. However bearish price action is crude oil market for fourth consecutive trading session limited commodity linked currency Loonie’s gains in broad market. As of writing this article, the USDCAD pair is trading at 1.3113 down by 0.33% on the day. However there is lack of fundamental support for Loonie to keep the pair below 1.3100 handle resulting in pair rebounding from intra-day lows. For now, both sides of pair have equal positive and negative sentiment priced into market resulting in pair trading inside a wider range bound price limit. Increased risk appetite in market limits USD’s upside move, while bearish crude oil price limits CAD’s gains resulting in both sides waging war for control of momentum at every single turn.


As of now, overnight gains have been completely erased and pair is trading near flat with Canada showing signs of upper hand. Investor focus remains on US economic docket, highlighting the release of ISM manufacturing PMI for some fresh impetus during North American market hours while Canadian calendar remains silent for the day. When viewed from technical standpoint, a follow-through weakness is likely to find support near the 1.3100 handle and is closely followed by 100-day SMA support near the 1.3080-75 region, which if broken might accelerate the slide further towards the key 1.30 psychological mark. On the flip side, the 1.3165-70 regions now seems to have emerged as an immediate strong hurdle, above which the pair is likely to aim towards reclaiming the 1.3200 handle before eventually darting towards the 1.3225 supply zone.

This article was originally posted on FX Empire