USD/CAD Daily Price Forecast – US Dollar To Retain Positive Price Action

A sharp decline in crude oil prices undermined Loonie and remained supportive of positive USD price action.
Colin First

The USDCAD pair on Thursday saw positive price action as US Dollar remained unfazed by US Greenback’s weakness in the broad market. Further, dovish crude oil price in global markets weakened Canadian Loonie adding positive support to USD bulls on their positive price action. Positive Philadelphia Fed manufacturing index and Jobless data added strength to the US Dollar in North American market hours resulting in the pair closing on a positive note on Thursday. However, profit booking activity on US Dollar’s gains led to pair seeing consolidative price action during Pacific-Asian market hours. The pair continued to trade rangebound in Asian market hours as EU’s decision to grant an extension on Brexit deadline to the UK pressured dollar in Asian market hours.

Macro Data Updates Eyed For Short Term Profit Opportunity

However, the price of crude oil in spot and forex market saw a decline below $59 per barrel and this led to US Dollar resuming its positive price momentum from yesterday. While fundamentals continue to support positive price action in the crude oil market, profit booking activity post price hitting new 2019 highs seems to have led to some sort of corrective price action. As Crude oil price fell in the broad market, Canadian Loonie which is linked to Crude oil saw sharp declines adding support to USD bulls similar to price action in the previous trading session.

Investors now await macro data updates for short term profit opportunities and directional cues as the trading session comes to close for the week. On the release front, during American market hours, economic calendar for both sides of the pair are highly active. US economic calendar will see the release of Manufacturing PMI. Services PMI & Existing home sales data while the Canadian calendar will see the release of Core CPI and Core Retail sales data updates. The forecast hints at a positive outcome in Canadian macro data and mixed outcome with multiple dovish macro data outcome for US calendar. If the macro data outcome meets expectations, the US dollar is likely to weaken in the broad market resulting in consolidative price action for the rest of the day.

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