USD/CAD Daily Price Forecast – Higher Crude Prices Sent the Loonie Down

The Loonie started trading on Monday near 1.3442 sound levels. The opening showcased a tumbling rally, losing around 15 pips, reaching near 1.3430 levels. Anyhow, the Loonie managed to cover up these lost gains, uplifting back to the opening levels. The USD/CAD pair found consolidation phase at this point for quite a while. At around 09:00 GMT, the pair dropped straight to 1.3420 levels, over increased selling pressure with higher traded volume.

The Crude Oil West Texas Intermediate (WTI) Futures was hovering near the top levels of $ 62.6 per barrel. The commodity made a sharp swing moving upwards from $61.22 per barrel to $62.60 per barrel, 2.25% up. And, there is an inverse relationship between the Loonie and the Crude prices which pushed down the pair.

Investors remained cautious on the back of escalating US-Sino trade concerns. Today, news on supply disruptions in the Middle East left the trading community under tense. Four commercial vessels near Fujairah, UAE got sabotaged.

Meanwhile, the US Dollar Index slipped in the Asian session and was hovering near 97.26 levels. The Greenback was experiencing significant setbacks after the US imposed new tariff structure on Chinese Imports. A few moments ago, Donald Trump tweeted that the US is heading in the right direction on US-Sino trade talks. In the tweet, the President had intended on China’s retaliation. The US President’s comments have further escalated the Trade deadlock and resulted in undermining the growth of the overall economy.

USD/CAD Influencing Events

Today, two prominent US events remain scheduled at around 13:10 GMT. First, the President of the Boston Fed, Mr. Rosengren will give his opinion over the US economic outlook. Second, the Vice- Chairman of the Fed’s Board of Governors, Mr. Clarida will express his views on the MPC. Statements of both of these Prime Executives may play a key role in improving the market interest in the US economy.

On the CAD front, no substantial events are impacting the USD/CAD pair. Hence, the market awaits for any progressive news on the US-China trade dispute and also the Fed’s Vice Chair’s comments.

Technical Analysis

The Loonie hovered in the upper vicinity of the Bollinger Bands (BB) and alluded a bull call. At 09:00 GMT, the USD/CAD pair had crossed the EMA of the BB and went downwards. There was an excessive selling pressure on the pair which allowed the pair to damage the BB boundaries. All the significant SMAs stood well above the pair, referring a bear call. The pair may find the support near 1.3413 levels and some resistance near 1.3444 levels. The RSI indicated momentum near 43 levels.