Yahoo Finance USD/CAD Daily Price Forecast – Loonie Suffers On Declining Crude Oil Price
USD/CAD pair is regaining from losses incurred early in the month as Canadian Loonie began to lose its bullish momentum post Bank of Canada interest rate decision update last Wednesday. While Loonie gained since early January backed by increased risk appetite in broad market, positive progress in Sino-U.S trade talks and bullish rebound in crude oil price in broad market, post slight recovery which began on Wednesday, further profit booking actions and slight decline in crude oil price in broad market is beginning to eat away at early losses with each passing day. Further cues from Asian market today, on disappointing Chinese trade data investor sentiment turned dovish resulting in both equity and forex markets seeing sharp declines.
Risk Asset Sell-off Boosts Greenback
The cues from Asian market are yet to die out as Oil market is also suffering across broad market on disappointing trade data. China is biggest importer of global crude oil and this has great impact on crude price across globe. A sign of slowdown in Chinese economy hints at low oil consumption and demand which weighs down crude oil significantly. Given that latest data was worst decline in two years for monthly readings, the impact on crude oil which gained recently on Sino-U.S. trade optimism is very high. Loonie being a crude oil linked commodity based currency also suffered losses owing to said reason. As of writing this article, the pair is on positive price action for fourth consecutive trading session and is trading at 1.3275 up by 0.10% on the day.
However upside price action is limited owing to the fact that US bulls lack strength to carry forward with today’s recovery momentum. While broad market risky assets and currencies sell-off boosts USD that is the only factor helping recovery action. Dovish Fed stance and partial shutdown of US government continues to weigh down US Greenback in broad market greatly hurting demand for said currency in broad market. On release front, there is no update scheduled either in US or Canadian market leaving the pair in mercy of broad based USD and crude oil price dynamics. Expected support and resistance for the pair are at 1.3255, 1.3235, 1.3205 and 1.3280, 1.3295, 1.3322 respectively.
This article was originally posted on FX Empire
