USD/CAD Daily Price Forecast – USD/CAD Consolidates above 1.30 but Remains near Weekly Lows on Subdued USDModest USD rebound/weaker oil prices helped regain some positive traction.
The USD/CAD pair caught some bids on Thursday and has managed to recover a minor part of previous session’s slump to fresh monthly lows, below the key 1.30 psychological mark. A combination of positive trade-related developments, coupled with softer US PPI figures prompted some aggressive selling on Wednesday and dragged the pair below 100-day SMA important support. Comments by Mexico’s Economy Minister Ildefonso Guajardo, saying that there is a high chance of a possible US-Canada trade deal turned out to be one of the key factors boosting the Canadian Dollar. As of writing this article, the USDCAD pair was trading at 1.3016 up 0.15% on the day.
Sino-U.S Trade Talks & Crude Oil Price Action Affects the Pair’s Momentum in Short Term
Meanwhile, trade tensions between the world’s two largest economies eased after The Wall Street Journal reported that the US is proposing a new round of trade talks with China. This against the backdrop of US data, showing that wholesale cost for US goods and services declined for the first time since February 2017, weighed on the US Dollar and kept exerting downward pressure on the major. The USD selling pressure now seems to have abated, at least for the time being. This along with declining crude oil prices undermined the commodity-linked currency – Loonie and assisted the pair to regain some positive traction.
The uptick, however, seemed lacking any strong conviction/follow-through as investors preferred to remain on the sidelines ahead of today’s important release of the latest US consumer inflation figures. Any meaningful up-move now seems to confront some fresh supply at the 100-DMA support break-point, now turned resistance, near the 1.3040 region, above which the pair is likely to aim towards reclaiming the 1.3100 handle. On the flip side, the 1.2980 level now becomes an immediate support to defend, which if broken might turn the pair vulnerable to extend the downfall towards testing the 1.2900 handle ahead of the 200-day SMA support near the 1.2865 region.