USD/CAD Daily Price Forecast – Loonie Continues To Gain Momentum Over Spike In Crude Oil PriceBullish run in oil prices supports Loonie on its positive price action as investors await BOC MPC update & Fed Meeting minutes.
USDCAD pair is trading in red for sixth consecutive trading session today underpinned by increased risk on trading activity in global markets and bounce in crude oil price. The pair hit fresh one month lows today as Loonie gained momentum owing to crude oil price breaching $50 per barrel. Equity and forex markets are seeing positive price action since trading session opened for the week on optimism surrounding Sino-U.S trade talks and while the talk between two parties went longer than expected, it concluded on positive note earlier today with both parties having found some common ground despite key issues remaining unresolved. Crude oil gained sharply today on positive headlines relating to China & U.S trade talks.
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BOC MPC Update & Fed Meeting Minutes Are Main Focus Of Investors
While global over production and glut scenario played a major role in crude oil price decline, China-U.S. trade war also played a major role as it caused economic slowdown across globe and news of progress is viewed as positive sign for economic growth and crude oil demand in global markets. Both spot and futures markets gained by 2% today with spot price of US crude oil moving back above $50 per barrel which provided great deal of fundamental support to crude oil linked currency – Canadian Loonie. As of writing this article, USDCAD pair is trading at 1.3237 down by 0.06% on the day. While US dollar recovered yesterday supported by pick up in US Treasury Yields, ongoing political issues in USA and partial government shutdown continues to weigh down Greenback in broad market which adds positive influence to Loonie bulls.
On release front today, both Canadian and US calendar have a busy schedule. US calendar sees the release of EIA crude oil inventory data which is forecast to see draw in inventory stockpile data and latest FOMC meeting minutes. A draw in crude inventory is positive for crude oil price as it suggests increased sales and less production of crude oil. Meanwhile Canadian calendar will see release of Bank of Canada’s monetary policy report and interest rate decision which is expected to remain unchanged. Reaction of traders post BOC MPC update will decide the pair’s near term future as a rebound in USD now would be supported by positive updates relating to Sino-U.S trade talk proceedings which will erase most of Loonie’s gains. Immediate support and resistance for the pair are at 1.3200, 1.3160 and 1.3280, 1.3300 price levels respectively.