USD/CAD Daily Price Forecast – USD/CAD Breaches 1.29 Handle on Weak US Greenback in Broad Market

The USD/CAD pair struggled to build on overnight modest rebound from multi-day lows and remained capped below the key 1.30 psychological mark. The pair extended last week’s rejection slide from 100-day SMA and was kept losing ground for the third consecutive session on Monday. A combination of factors exerted some heavy downward pressure and dragged the pair to an intraday low level of 1.2955. As of writing this article, the USDCAD pair is trading at 1.2960 down by 0.24% on the day. The already weaker US Dollar was further weighed down by the disappointing release of US monthly retail sales data, while the Bank of Canada Business Outlook survey report fueled rate hike expectations and underpinned the Canadian Dollar.

US Job Data Could Help US Greenback Regain Hold Above 1.30 Handle

The pair, however, managed to find some support at lower levels and managed to rebound around 35-pips from daily lows, albeit lacked any strong follow-through amid a subdued USD demand. Meanwhile, a weaker tone around crude oil prices, which tend to dent demand for the commodity-linked Loonie, extended some support and might now help limit any immediate sharp downside, at least for the time being. Hence, it would be prudent to wait for a sustained break in either direction before positioning for the pair’s intraday momentum amid relatively thin economic docket. On release front, Canadian market saw dovish readings in Foreign Securities Purchases (Aug) while US market is yet to see macro updates for the day.

Today’s calendar in US market is scheduled to release JOLTS Job Opening data which has hawkish forecast while Industrial and Manufacturing production data are also scheduled to release for the day but aren’t expected to provide much impact to Greenback’s momentum in broad market.  When looking from technical perspective, the 1.2955-50 zone might continue to protect the immediate downside, below which the pair is likely to accelerate the fall towards testing the very important 200-day SMA support near the 1.2900-1.2895 region. On the flip side, momentum beyond the 1.30 handle is likely to confront fresh supply near the 1.3040-50 regions and is followed by the 100-DMA barrier, currently near the 1.3065 region.