USD/CAD Price Forecast – USD/CAD Hits New Yearly Tops at 1.3153 As Greenback Grows Stronger

The USD/CAD pair built on its yesterday’s extensive rally and reached the highest levels since June 2017 just ahead of the 1.3150 mark, in the wake of the ongoing rally in the US dollar across its main competitors. The greenback continues to remain broadly underpinned by the Fed’s hawkish rate hike that underscores the monetary policy divergence between the Fed and its global peers. The USD index gains +0.37% to test the November 2017 highs at 95.15. Meanwhile, the Canadian remains weighed down by the latest comments from the Bank of Canada (BOC) Senior Deputy Governor Wilkins, as she noted that the US tariffs on Canada are not good news and its effect on the consumer prices are yet to be evaluated.

USDCAD Breaks Higher

Household debt is still cause for concern in the Canadian economy, and the US tariffs could be poorly timed as households are still trying to claw their way out of the debt bubble formed coming out of the 2007-08 financial crisis. Also, listless trading seen around oil prices also failed to offer any support to the resource-linked Loonie. Both crude benchmarks trade on the defensive heading into the OPEC meeting scheduled on June 22nd in Vienna. Saudi Arabia and Russia are said to propose output boost at the meeting. In the meanwhile investors focus on US President Trump’s proceedings on levying tariff for import of Chinese goods.

USDCAD Hourly

On release front, Canadian calendar was relatively silent on Thursday with dovish house price index data while US markets saw positive outcome in retail sales and import/export price index data. Macro data remains relatively light for both US and Canada today with Canadian market seeing Foreign securities purchase and manufacturing sales data while US market will see updates on Industrial productions, Michigan consumer sentiment and Michigan inflation expectations along with U.S Baker Hughes Oil Rig Count data. Moving forward the pair is facing strong resistance around 1.31660 and 1.32100 while there is a strong support around 1.30216 which if breached, the pair will see continued downtrend movement till 1.29195 price handle.

This article was originally posted on FX Empire

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