Yahoo Finance USD/CAD Daily Price Forecast – USD Continues Recovery Price Action For Third Consecutive Session
US Dollar regained upper hand since the trading session began for the day and has maintained a steady bullish price action in both Asian and European market hours albeit trading well within last week’s wider price limits. Despite Friday’s better than expected CPI reading in Canada, Loonie failed to gain upper hand owing to weak crude oil price action which combined with cautious investor sentiment from European markets helped dollar gain the upper hand. While price dynamics surrounding US Greenback is dovish in the broad market similar to British Pound, Canadian Loonie seems to operate on different price dynamics when compared to most major global currencies.
Crude Oil Price Is Main Driving Force Behind Loonie
Ever since dollar began its rebound action in the latter half of the second week of January, it has managed to maintain a steady uptrend price action despite relatively low pace of gains. Dollar bulls are expected to continue steady upward price action against Canadian Loonie as crude oil is trading in red in global markets today. Spot Crude oil WTIUSD is trading near flat with bearish bias down by 0.06% on the day while futures markets are down by more than 30% in global markets which greatly affect price momentum of commodity-linked currency Canadian Loonie. However, OPEC’s production and supply cut which is currently in effect in global markets have helped limit Crude oil price decline and could be viewed as saving grace for Loonie as stable crude oil price will underpin Loonie bulls limiting USD’s gains.
As of writing this article, USDCAD pair is trading at 1.3291 up by 01.28% on the day. The pair is expected to continue range bound action for rest of the day owing to thin trading volume as US market is closed today owing to the celebration of Martin Luther King, Jr day. Further volatility is also expected to remain low as both Canada & U.S. macro calendar remain silent for the day. When looking from a technical perspective, the probability for downside move still remains high as both RSI & Stochastic momentum indicators are currently moving towards the oversold region in daily charts, while hourly intra-day chart sees the indicators move down from over brought region and move towards neutral territory. Expected support and resistance for the pair are at 1.3240, 1.3200 and 1.3315, 1.3345 respectively.
This article was originally posted on FX Empire
