USD/CAD Daily Price Forecast – Range Bound Action To Continue Ahead of Senate Meeting Outcome

The pair is trading range bound as investors await US EIA crude oil data and US Senate meeting outcome for directional cues.
Colin First
USDCAD Thursday

Having found a bottom near1.3179 handle earlier this month, US dollar has made a significant recovery against the Canadian dollar. Despite crude oil price finding support above $50 per barrel and US dollar being weakened in the broad market owing to dovish fed stance and partial shutdown in US government, Greenback has managed to establish and sustain a solid bullish price rally which is currently seeing consolidative action in the upper half of 1.33 handle. One of the key factors that helped US dollar consolidate its hold above 1.33 handle is disappointing monthly Canadian retail sales data which hit the market yesterday. Despite US dollar seeing downward action in the broad market, worse than expected Canada’s macro data helped bulls hold their fort on recent gains.

US Senate Meeting Outcome To Decide Medium Term Directional Bias of US Dollar

While US dollar continues to suffer bearish pressure owing to political issues from the US and declining 10-year US Treasury Yields, cautious investor sentiment in the broad market ahead of tonight’s US Senate meeting continues to underpin demand for US Greenback. However, rebound in crude oil price action in European market hours helped Loonie hold back USD bulls from hitting 2½ week highs hit earlier this week. The outcome of US Senate vote to reopen US government scheduled to occur today is the main highlight of the day and positive outcome will help US dollar establish a long term bullish price rally while continued partial government shutdown post senate meeting will give CAD bulls some breathing space from the recent positive rally.

As of writing this article, USDCAD pair is trading at 1.3369 up by 0.23% on the day. Investors are now on the lookout for macro data release for short term trading opportunities. Canadian calendar is silent for the day while US calendar is scheduled to release preliminary Service and Manufacturing PMI updates and EIA crude oil inventory data. Regardless of Senate outcome, a build in US crude oil stockpile data will result in crude oil price seeing downward action which will help USD breach 1.34 handle during today’s American market hours. However, a draw in Crude oil stockpile data will help Loonie bulls drag the price action back into 1.32 handle for rest of the week’s trading session.

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