USD/CAD Daily Price Forecast – USD/CAD Consolidates After Steep Downtrend Movement on Crude Oil Price Action

The Canadian Dollar surged after source reports that Canada were said to provide concessions through allowing US farmers access to Canada’s dairy market in order to reach a NAFTA deal. Canada’s protected dairy industry has been one of the major stumbling blocks in NAFTA renegotiations, as such, this concession from Canada increases the possibility that the US and Canada could reach an agreement before the October 1st deadline. That said, sentiment around NAFTA has been relatively upbeat with the Canadian Trade Minister stating that talks had been constructive. As of writing this article, USD/CAD pair is trading at 1.3052 down 0.13% on the day.

Upbeat Crude Oil Price Action & NAFTA Optimism amid Trade War Woes Supports Range Bound Price Action in Immediate Future.

The pair took a steep fall in late North American market hours on NAFTA headlines and has since consolidated on the lower end of overnight decline, as Canadian Loonie is gaining strong positive influence from positive price action in Crude oil market. The pair is currently moving in a range bound pattern as investors await fresh catalysts for the next move. The spot traded almost unchanged for the day, keeping its range near weekly lows of 1.3043 as loonie is underpinned by positive news reports on NAFTA proceedings in both US and Canadian markets. Moreover, the 2% rise in the US oil also collaborated to the overnight recovery in the resource-linked Loonie. WTI rallied on declining US inventories and looming US sanctions on  Iran that have triggered supply disruption concerns.

Crude oil market also has additional bullish influence in global market as momentum gained over reports of shooting at Libya’s National Oil Corp. headquarters remains prevalent in market. Despite the buoyancy seen around the Canadian dollar, the spot manages to contain the downside amid renewed trade tensions, this time between US and Japan, which helped put the bid back under the US dollar across the board. Moving forward near-term outlook is expected to remain negative as NAFTA optimism remains strong in broad market. Expected support and resistance for the pair are at 1.3039, 1.3016, 1.3000 and 1.3077, 1.3102, 1.3146 respectively.