USD/CAD Daily Price Forecast – Canadian Dollar Gained On Weak USD And Positive Crude Oil Price

Crude oil bulls underpinned by positive crude oil price and weaker USD ahead of Fed forward guidance update and the pair is likely to trade range bound until the pair gets a clear directional bias.
Colin First

The USDCAD pair yesterday saw sharp upward price action despite the prevalent weakness surrounding US Greenback in the broad market.  This upside move was a result of  Canadian Loonie suffering dovish pressure from weak Crude oil price rally. However, the upside move came to an end later in the day as risk-averse investor sentiment limited US Dollar’s momentum.  Further, the price of crude oil recovered in spot market later in the day resulting in USD/CAD pair closing on dovish note despite positive start for the week. The US Dollar is facing a high level of dovish pressure in the broad market owing to dovish FOMC expectations.

FOMC Update Eyed For Directional Bias

Given disappointing US macro data outcome in the recent past, investors expect that the Fed Forward guidance to be dovish. The comments of various key Fed members from recent past also displayed a dovish stance of FOMC on rate hike plans. The crude oil price gained momentum across the day’s trading session and scaled new 2018 highs today. Canadian Dollar being a commodity-linked currency gained momentum on positive crude oil price action in the global market. The USDCAD pair built on overnight declines from the previous session high of the mid-1.33 handle to mid-1.32 handle on CAD’s rally.

Aside from positive crude oil price, CAD bulls also gained strength from a weaker US dollar in the broad market. Investors now await macro data updates for short term directional cues & profit opportunities ahead of tomorrow’s FOMC update. On the release front, Canadian calendar remains silent for the day. However, the U.S. calendar will see the release of Factory orders data. The price action of the pair for the rest of the day will be based on Crude Oil price & strength of USD in the broad market. The pair is now likely to continue rangebound price action trapped within above-mentioned price levels ahead of US FOMC update. The outcome of tomorrow’s Fed forward guidance will now provide directional bias for short to medium term price action and is the main focus of the investors.

Please feel free to let us know what you think in the comments below.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.