USD/CAD Daily Price Forecast – Positive Crude Oil Price Underpins CAD Bulls Favoring Dovish Price Action

The USDCAD pair yesterday saw two-way price action which ended on near neutral note. While risk-averse trading activity earlier in the day influenced positive price action, American market hours saw mixed macro data outcome which was shortly followed by a speech by Fed Chair Jerome Powell in front of Senate banking committee during which he reaffirmed Fed’s patient approach towards rate hike plans for 2019. Powell stated that recent events have resulted in mixed signal and so FOMC required more time to observe market before making key decisions. This caused US Government bond yields to fall sharp by nearly 1% affecting the strength of USD in the broad market.

Macro Data Updates To Provide Short Term Profit Opportunities

Following the overnight decline, the pair continued to range bound action in early Asian market hours but soon saw further downside action as crude oil price gained positive price action in the broad market. Crude oil price traded positive in the global market as recent data suggests that OPEC members continue to enforce production and supply cut despite US President Donald Trump expressing his dissatisfaction against the cartel for rising crude oil prices in the broad market. Crude oil price went above $6 per barrel and this provided significant support to CAD bulls in the broad market.

Canadian Loonie being a commodity-linked currency gains positive price action whenever crude oil price sees positive price action in the market. Investors now look to macro data updates for short term profit opportunities and headlines on major geopolitical events for directional cues. US President Donald Trump is expected to meet N.Korean Premier Kim Jong Un in the Vietnam summit to discuss denuclearisation talks and is also likely to meet with Chinese Premier Xi Jing Ping. This has caused investors to hold back from placing major bets today. On the release front, Candian macro calendar will see the release of CPI data while the US calendar will see the release of Crude oil inventory data, pending home sales data and yet another speech by Fed Chair Jerome Powell during American trading session and this is expected to provide some meaningful trading opportunities during American market hours. Expected support and resistance for the pair are at 1.3130, 1.3110, 1.3090 and 1.3175, 1.3195, 1.3217 respectively.

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