USD/CAD Daily Price Forecast – USD/CAD Consolidates around Last Week’s Low on Strong Canadian Macro Data

The USD/CAD pair oscillated in a narrow trading range at the start of a new trading week and was seen consolidating Friday’s downfall to the 1.3050 support area. The latest Canadian consumer inflation came in much stronger than expected and prompted some aggressive selling around the major on Friday. Accelerating inflation raised prospects for a BOC rate hike move next month and was seen as one of the key factors behind the pair’s sharp retracement from over three-week tops. Meanwhile, a combination of positive factors – a modest US Dollar uptick and a weaker tone around crude oil prices, which tend to undermine demand for the commodity-linked currency – Loonie, eased the bearish pressure on Monday and helped the pair to defend the 1.3055-50 support zones, at least for the time being. As of writing this article, USDCAD pair is trading at 1.3071 up 0.07% on the day.

Sino-U.S. Trade Talks & FOMC Update Main Focus of Investors

It, however, remains to be seen if the pair continues finding some buying interest at the mentioned support or resumes with its retracement slide as market participants now look forward to the BOC Senior Deputy Governor Carolyn Wilkins’ scheduled speech later during the early North-American session. Investors this week will also confront the release of FOMC monetary policy meeting minutes, which along with the Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium will further contribute towards determining the pair’s next leg of directional move. USD dollar remains strong in broad market and could see upswing during the next two trading sessions as investors also focus on Sino-U.S. trade related talks which are to take place on 21^st & 22^nd of this month.

Any fruitful agreement during the talks could boost both currencies in global market which in this case could mean US greenback breaking away from consolidation and aiming to move back above 1.31 Handle. A look at technical perspective in 4 hour and daily charts shows any meaningful recovery attempt is likely to confront fresh supply near the 1.3100 handle and is followed by 50-day SMA hurdle near the 1.3135-40 price levels. On the flip side, weakness below mid-1.3000’s now seems to pave the way for an extension of the bearish trajectory back towards testing the key 1.30 psychological mark en-route 100-day SMA support near the 1.2980-75 price levels.