USD/CAD Daily Price Forecast – CAD Gains on Crude Oil Price Rebound

The USDCAD pair saw rangebound price action across yesterday’s trading session despite risk on investor sentiment prevalent in the global market. Canadian Loonie was pressured by weak crude oil price and government yield curve inversion which supported Bank of Canada’s dovish stance. Even a worse than expected US Q4 GDP data failed to give Canadian Loonie a breakout or breathing space.  However, the pair got a bearish breakout during Pacific-Asian market hours, early Asian market hours to be precise as government bond yields of major economies saw positive rebound action. This helped improve risk sentiment in the global market erasing any and all concerns of recession in the USA and slowdown in the global economy.

Canadian GDP Data Eyed For Directional Cues

This helped crude oil price see a sharp rebound in price action as healthy economic activity is a sign of increased demand for crude oil owing to regular consumption. Further, trade talks between China & U.S.A. concluded on positive note according to delegates from both countries despite a lack of details on the discussion. But US representatives stated that talks will resume next week in Washington with Chinese delegates traveling to the U.S.A. This caused investors to expect the possibility of confirmation on trade deal being signed by two nations during early April which further added support for crude oil bulls pushing the price of crude oil above $60 per barrel.

Also increased risk appetite among global investors and rebound in government bond yields provided positive support to Canadian Loonie. This caused the pair to see sharp declines from 4-week tops all the way below mid-1.33 handle. The pair has since traded rangebound near 1.335 handle while investors await macro data updates for short term directional cues and profit opportunities as the trading session comes to close for the month. Canadian calendar will see the release of Q4 GDP data and RMPI data while US calendar will see the release of  Chicago PMI, New home sales data, Core PCE price index and PCE deflator data updates. A Positive Canadian GDP update will help Loonie retain its positive price action while dovish outcome will result in USD bulls re-establishing control over price action.

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