USD/CAD Daily Price Forecast – USD Breached 1.33 Handle Over Declining Crude Oil Price

USDCAD pair has undergone a two way price action over last 24 hours owing to price swing in crude oil market. While broad based risk averse price action has had its own influence in price momentum, crude oil price continues to play a major role since start of the week. Headlines of escalating trade war between US – China & Europe, disappointing Chinese economic data, no-confidence vote against Prime Minister in UK and Greece played major role in influencing risk averse trading activity. Back to back news from China had greater impact on crude oil price action and Loonie being a crude oil linked currency suffered on dovish headlines from China.

US EIA Crude Oil Inventory Update Triggered Crude Oil Decline

US Greenback is receiving strength in forex market as risk averse trading activity saw high sell-off in risky currencies boosting demand for dollar in broad market. This was further supported by slight rebound in US Treasury Yield yesterday but T.yield has since subdued slowing down dollar bull’s momentum. Dollar further suffers bearish influence owing to partial US government shutdown and dovish Fed stance resulting in neither side of the pair managing to gain upper hand. However the pair did manage to hit 8-session high’s as Crude oil price suffered following US EIA Crude inventory data. Forecast hinted at a draw in US crude oil stockpile data but data showed unexpectedly high stockpile increase which suggested high level of production in US.

This caused crude oil price to drop sharply resulting in US Greenback gaining upper hand albeit lacking strength to make a breakout owing to lack of fundamental support. As of writing this article, USD/CAD pair is trading at 1.3312 up by 0.45% on the day.On release front today, Canadian calendar is silent but US calendar is highly packed and market will see the release of Building permits, Housing starts, Goods trade balance data, Philadelphia Fed manufacturing Index and new home sales data which are expected to keep the pair highly active for rest of today’s market hours. Moving forward the pair will see strong resistance around 1.3340 handle while support will be at 1.3235 respectively in immediate future.