The USDCAD pair yesterday saw a sharp spike during North American market hours as US dollar bulls were backed by Greenback’s strength in the broad market and declining crude oil price action. The pair even managed to breach mid-1.31 handle and managed to establish a positive price rally well above mid 1.35 by end of American market hours before a speech from US President Donald Trump. However, the pair faced some resistance on its upside move in the Asian market over President Trump’s state of union speech. President Trump accused China of stealing U.S. intellectual property and blamed China for loss of jobs and profit in the American market. He also re-affirmed his commitment to building the border wall.
US Stockpile Data Continues To Hinder Crude Oil Price Action
This caused investor sentiment surrounding dollar to take a hit as Trump’s comments renewed fears of the trade war between China & U.S. Trump’s comments also increased worry of government shutdown given the fact that government was only re-opened for a temporary time frame of three weeks. Further, a decline in crude oil price over increasing crude oil stockpile and easing the impact of U.S. Sanctions on Venezuelan Crude oil added more pressure to Loonie. Canadian Dollar being a commodity-linked currency suffers bearish price action whenever crude oil declines in the broad market. This helped USD bulls stage a sharp upside move during late European market hours helping the pair breach 1.32 handle and establishing new weekly highs.
As of writing this article, USDCAD pair is trading at 1.3185 up by 0.39% on the day. Disappointing Ivey PMI data from Canada and increasing stockpile data from U.S. EIA also added bearish influence to Canadian Loonie. When looking from the technical perspective, the path with least resistance moving forward is to the upside. Now that the pair has managed to establish a stable rally above mid -1.31 handle and US Dollar also receives fundamental support in form of a weak loonie, the pair is expected to continue steady uptrend price action for rest of American market hours and breach 1.32 handle once again by Asian market hours tomorrow.
This article was originally posted on FX Empire
More From FXEMPIRE:
- GBP/USD Price Forecast – British pound continues to fight
- Gold Price Forecast – Gold markets continue to stabilize
- Natural Gas Price Prediction – Prices Fail to Gain Traction
- USD/JPY Price Forecast – US dollar drifts lower
- Gold Price Futures (GC) Technical Analysis – February 6, 2019 Forecast
- Natural Gas Price Forecast – natural gas continues to struggle