Yahoo Finance USD/CAD Daily Price Forecast – Positive Crude Oil Price Keeps USDCAD Rangebound Ahead of US PMI Update
The USDCAD pair yesterday saw rangebound price action near mid-1.31 handle ahead of US market hours but upbeat US GDP data influenced a short burst of bullish price action in favor of US Dollar. This rally was further supported by a spike in the long term US Treasury bond yields following sentiment improving in the market in favor of USD supporting USD bulls on their positive price run. However, crude oil price action recovered in the broad market and this helped erase last nights gains preventing the pair from building up on overnight gains resulting in the pair resuming range bound action near weekly lows.
Canadian Macro Data Outcome Gave USD Bulls A Bullish Boost
The rally in favor of CAD was supported by the positive price of crude oil in the broad market as the Canadian Dollar was commodity-linked currency. The positive price action of crude oil was supported by OPEC production cuts, data which hinted that Venezuelan output had reduced by 60% and positive Chinese Caixin manufacturing PMI which was interpreted as a signal for more demand of crude oil owing to high manufacturing activity. However, later in the day, disappointing Canadian GDP data resulted in USD regaining its edge over CAD. Further, crude oil also began falling in the spot market in late European market hours adding support to Dollar bulls.
Investors now await US macro data for directional cues and short term profit opportunities as the trading session comes to close for the week. The US economic calendar was scheduled to see the release of Core PCE price index, PCE deflator data, ISM Manufacturing PMI update, Michigan consumer sentiment/expectations data, and Baker Hughes Oil rig count. The forecast hints at a mixed outcome, but an increase in oil rig count could lower crude oil price making it dovish for CAD while positive ISM Manufacturing PMI will give USD the trigger needed for bullish breakout as USD bulls are already strong in broad market with fundamental support and this could result in the pair closing for the week in favor of USD.
This article was originally posted on FX Empire
