USD/CAD Daily Price Forecast – CAD Breaches 1.30 Handle on Weak USD And NAFTA Related News

The USD/CAD pair struggled to build on overnight strong up-move and remained capped below the 1.3000 handle through the early European session on Friday. After yesterday’s goodish rebound, the US Dollar met with some fresh supply on the last trading day of the week and failed to provide any additional boost to the pair’s solid rebound from the 100-day SMA support. This coupled with the prevailing bullish sentiment around crude oil prices supported the commodity-linked currency – Loonie and further collaborated towards keeping a lid on any follow-through up-move for the major. Despite a combination of negative factors, bulls have managed to hold the pair above mid-1.3000’s, an important pivotal point, and hence, a follow-through up-move, towards testing 50-day SMA hurdle, remains a distinct possibility.

NAFTA Remains Main Factor of CAD’s Strength

While Oil price has been rallying to session highs helping limit USD gains, the support from same has failed to help Loonie breach 1.3050 handle. As of writing this article, USDCAD pair has been trading in a subdued range at 1.3064 down 0.13% on the day. With NAFTA talks continuing to show optimistic signs – at least in terms of headlines – it’s helping to keep the Loonie buoyed in recent times. NAFTA talks are the biggest driver for the Loonie at the moment so a lot of the price swings will rely on that. While the technical bias favors buyers for the moment, the lower highs pattern suggests that sellers are poised to try and break that stranglehold. Traders now look forward to the release of US durable goods orders data in order to grab some short-term opportunities while Canadian calendar remains silent for the day.

The key focus, however, would remain on the highly anticipated speeches by the Fed Chair Jerome Powell and BOC Governor Stephen Poloz at the annual Economic Policy Symposium, in Jackson Hole. Comments from the respective central bank heads would be closely scrutinized for some fresh clues over the near-term monetary policy outlook and eventually help determine the pair’s next leg of directional move. Immediate resistance is pegged near the 1.3135 region (50-day SMA), above which the pair seems all set to reclaiming the 1.3200 round figure mark. On the flip side, the 1.3050 area now seems to protect the immediate downside, which if broken might turn the pair vulnerable to slide back towards retesting 100-day SMA strong support, sub-1.30 level.