USD/CAD Daily Price Forecast – Loonie Gains Upper Hand As USD Lost Strength on News of Sino-U.S. Trade Realted Talks

The USD/CAD fell back into 1.3115 ahead of Thursday’s London market session after hitting resistance at 1.3175 yesterday. Wednesday saw the USD/CAD mark in a new high for August, but the Dollar still remains under June and July’s peaks against the Loonie. As of writing this article, USDCAD pair is trading at 1.3125 down 0.13% on the day. Crude oil prices tumbled on Wednesday after Energy Information Administration (EIA) info showed that US crude stocks are rising at a much faster pace than expected, and WTI barrels declined below $65, dragging the CAD down with it. However the USD has resumed giving up ground to the CAD on Crude oil price stabilizing around $65 and a weak US dollar in global market, though crude oil prices can be expected to continue sliding as demand for crude oil is expected to begin declining, which will see US reserves pile up at a much faster rate than most are prepared for.

Investors Focus on updates From Canadian Calendar in Next 48 Hours Before Placing New Bets

The loonie was the biggest loser in trading yesterday as poor risk sentiment, softer commodities, and lower oil prices weighed on the currency. Most of the overnight moves are starting to fade and resulted in a bit of a recovery for the loonie as a result. There’s nothing notable in the European trading calendar to shake things up so trading today will still highly depend on the ebb and flow in markets. USD has been on decline across major global currencies for majority of Asian market session as news hit market on Sino-U.S. trade related talks which is expected to occur later this month. Investors are keeping an eye on risk sentiment – in particular equities, metals, and oil for an indication of any further run lower in the pair.

On the release front, macro calendar is busy for both sides of the pair. Canadian market will see release of manufacturing sales which has a dovish forecast while US markets will see release of building permits data and Philadelphia Fed Manufacturing data which has dovish forecast. A better than expected US macro data could help US Greenback regain the upper hand while CAD investors will wait for Core CPI data scheduled to release tomorrow post Manufacturing sales update  before placing new bets. When looking at price action from technical perspective, immediate upside is capped off at 1.3175, with further resistance from late July’s peak of 1.3190, while this week’s low will act as support from 1.3050 with further support from last week’s bottom at 1.2960.