USD/CAD Daily Price Forecast – Canadian Loonie Holds Fort On Weak Crude Oil

The USDCAD pair on Friday saw a traded positive for the majority of the session but saw a sharp decline towards the end of trading session on disappointing US macro data update and upbeat Canada GDP data. The pair fell from mid-1.34 handle to mid-1.33 handle, post the decline the pair saw rangebound price action as Loonie received support from both macro data update and positive crude oil price in the global market. When trading session opened for the week, the pair resumed its trading activity well near Friday’s lows and traded range bound in the early Asian session.

Canadian GDP Update & Crude Oil Price Underpin Loonie Bulls

Optimism surrounding Sino-U.S. trade deal and headlines from China over the weekend which stated that the state council has decided to not impose tariffs on US goods in April as a sign of goodwill to the USA boosted risk appetite in the global market. Crude oil which has already been trading positive in the global market gained further momentum over Sino-U.S. trade optimism as a positive outcome could renew demand for increased crude oil in China. The prospect of increasing demand provided crude oil bulls with high positive influence helping spot US crude oil stay well above $60 per barrel across Asian and European market hours. Positive price action in crude oil helped commodity-linked currency Loonie gain strong fundamental support.

This helped Loonie retain its hold on price action resulting in pair declining slowly below the mid-1.33 handle. Further, increased risk appetite in the market which caused all major high-risk forex pairs to trade positive caused the US dollar to weaken in the broad market. Investors now await macro data updates for directional cues and short term profit opportunities. Canadian calendar will see the release of RBC Manufacturing PMI while US calendar will see the release of retail sales data, ISM Manufacturing PMI and Business inventories data updates. A positive outcome in US macro data will help US Greenback recover above mid-1.33 handle while negative outcome will help Loonie move below 1.3300 handle. As Canadian macro data lacks the strength to create a major impact on price action, broad-based strength of US dollar and crude oil price in the global market will set course for price action during today’s American market hours.

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