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USD/CAD Daily Price Forecast – Positive Crude Oil Price Action Underpins Loonie Bulls

Colin First

USDCAD pair is currently seeing subdued price momentum following two-way price action. US dollar erased gains made earlier this week as US Senate meeting yesterday failed to reopen partial shutdown in US government. The loss in greenback was further aggravated by declining US Treasury Yields however upbeat US macro data helped dollar bulls limit decline. As risk appetite in the broad market increased during Asian market hours, Greenback resumed its decline and hit an intra-day low of 1.3308. Cad bulls also received support from positive rebound in crude oil price early in the day. News hit the market that the U.S. government is expected to slap another sanction on Venezuela amid ongoing political wars in the country.

Macro Data Outcome To Decide Short Term Directional Bias

Venezuela is already seeing decreased crude oil production and export but sanctions from the U.S. could essentially create a huge dent by reducing daily circulation numbers by several hundred thousand barrels. While this news helped crude oil price recovery in the broad market, the gains were limited as current supply in the crude oil market is well in line with demand given the fact that production in U.S. market is at record highs and the market is seeing OPEC’s supply cut being balanced out by the output from U.S. exports. Canadian Loonie being a commodity-linked currency, gained upper hand against US dollar on crude oil price gain and broad market risk appetite. But the pair has managed to recover from intra-day lows despite trading in favor of Loonie.

As of writing this article, USDCAD pair is trading at 1.3320 down by 0.18% on the day. Moving forward investors are expected to focus on macro data releases for short term profit opportunities as the trading session comes to close for the week. On release front today, Canadian calendar is silent expect for budget balance which is unlikely to have any major impact on price action while US markets will see the release of new home sales data and core durable goods orders data. Better than expected readings in US macro calendar updates will lead to US dollar erasing early losses and closing on a neutral note, while dovish readings will result in the pair closing in red for the day. Expected support and resistance for the pair area at 1.3315, 1.3300 and 1.3331, 1.3347 respectively.

This article was originally posted on FX Empire

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