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USD/CAD Daily Price Forecast – Pick Up In US T.Yields Underpins US Dollar’s Hold On 1.32 Mark

By:
Colin First
Published: Jan 16, 2019, 15:21 UTC

Pickup in the US bond yields helped revive USD demand as investors await US EIA Crude oil inventory data.

USD/CAD Daily Price Forecast – Pick Up In US T.Yields Underpins US Dollar’s Hold On 1.32 Mark

USD/CAD pair is experiencing a good two way price action today as both sides of the currency pair are seeing news driven bulls fight for control of momentum. Broad based risk appetite has held the pair near recent lows, but US dollar has been gaining slow control of momentum over the week. As of today, the pair has managed to move from monthly lows of 1.31 handle to 1.32 handle were strong resistance limits further upside move. Meanwhile, market concerns over slowing European economy following comments of slowdown in growth during his speech yesterday and brexit vote turn out which saw government lose with worst margin in a century resulted in broad based USD sell off which supported USD bulls in broad market.

CAD Bulls Focus on EIA Crude Data

Further US dollar bulls gained strength in broad market as US Treasury Yields saw gains which is usually considered strong fundamental support for Dollar and likely to cement dollar’s recent position above 1.32 handle. Meanwhile Canadian Dollar which is commodity linked currency saw downside move owing to decline in crude oil price action. As comments from US trade representative Robert Lighthizer stating that no actual progress was made on key issues between China & U.S. hit market crude oil price slumped in broad market. The slide in crude oil is direct result of investors fear following update on recent trade talks i.e., China & U.S. are unlikely to strike a deal during the 90-day pause of trade war as China is major importer of crude oil.

Post intra-day gains, profit booking activity in late European market hours saw USD ease from intra-day highs and as of writing this article, USDCAD pair is trading at 1.3238 down by 0.196% on the day. Moving forward investors focus on macro data updates for short term profit opportunities as political issues in U.S.A continues to limit upside move in USD. On release front today, Canadian calendar has no major releases for the day, while US calendar will see release of Import and export price index and Crude oil inventory data. If EIA data shows draw in stockpile information as forecast, Crude Oil could gain positive price action indirectly supporting  CAD bulls which will result in further downside move during north american market hours.

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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