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USD/CAD Daily Price Forecast – CAD Erased Early Loss On Crude Oil Price Rebound

By:
Colin First
Updated: Feb 26, 2019, 17:33 UTC

Traders eyes remain glued to the Fed Chair Jerome Powell’s testimony for directional cues while crude oil price underpins CAD bulls.

USD/CAD Daily Price Forecast – CAD Erased Early Loss On Crude Oil Price Rebound

The USDCAD pair has been on steady uptrend price action since trading session opened for the week. Crude Oil price saw a sharp decline as US President Donald Trump expressed his contempt at OPEC enforced production cut which has led to increase of crude oil price in the broad market. As crude oil price went down, Canadian Loonie which is a commodity-linked currency saw sharp decline as bulls lost their fundamental support. While CAD suffered sharp declines, USD rose up supported by optimism surrounding Sino-U.S. trade talks. Sino-U.S. trade optimism also improved risk appetite in the broad market which weakened USD’s positive rally in broad market and limited gains yesterday.

Powell’s Speech Eyed For Directional Cues

However, following an initial bout of profit booking activity the pair resumed its positive price action and rose back above 1.32 handle as both Asian and European markets hours saw corrective price rally following profit booking activity on yesterday’s gains. Market showed signs of risk averse trading activity as investors awaited speech from US Fed chair Jerome Powell for directional bias before placing further bets. Also crude oil recovered from yesterday’s downside move and saw significant upside move which capped further gains and resulted in the pair falling back below 1.32 handle. As of writing this article USDCAD pair traded at 1.3174 up by 0.12% on the day well below intra-day high of 1.3244 on mixed macro data outcome in US macro calendar.

High risk appetite supported by Sino-U.S. trade talks optimism and hawkish crude oil price underpins Canadian loonie as investors await speech by US Fed Chair Jerome Powell for directional cues. Any headlines hinting at positive progress in Sino-U.S. trade talks is further likely to boost crude oil price and risk appetite in broad market. This suggests Canadian Loonie is likely to erase all gains made early in the day and gain control over short term price action. When looking from technical perspective, the pair faces strong resistance near mid – 1.32 handle to the upside and strong support near mid – 1.30 handle to the downside which needs to be breached for either side of the currency pair to establish steady price rally in its favor. The pair is expected to remain in range bound action in immediate and near future as long as the pair continues to remain within above-mentioned price range.

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About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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