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USD/CAD Daily Price Forecast – USD/CAD Declines As Crude Oil Rebounds

By:
Colin First
Published: Mar 7, 2019, 16:51 UTC

The pair is currently in consolidative price action as bulls lack strength to move higher while investors await US NFP data for directional cues.

USD/CAD

The USDCAD pair yesterday saw steady upside action supported by weak CAD. The US Dollar which was already trading positive with strong fundamental support from a spike in long term US Treasury yield got a sharp bullish boost following better than expected US ADP Non-Farm Employment data released yesterday. This helped the pair scale new 2019 highs post which it entered a phase of consolidative price action. While CAD continues to suffer dovish influence stemming from political tensions in Canada, influence from last week’s dovish GDP update seems to have waned away from CAD bulls. This helped CAD try to regain some ground during the Asian session today.

Macro Data Outcome Unlikely to Provide Directional Bias

Further, Crude oil price rebound in the broad market today after two consecutive trading sessions of trading in red. Crude oil erased all losses suffered earlier this week and staged solid gains and this helped CAD bulls drag the pair down from yearly highs hit in the previous session. However, the downside was limited owing to strong fundamental support for USD bulls resulting in rangebound price action across the day. Investors are now looking out for macro data updates from Canada and the USA for short term profit opportunities. On the release front, Canadian economic calendar is expected to see the release of building permits data and speech from Bank of Canada Governing Council Member Patterson.

Meanwhile, the US economic calendar will see the release of initial jobless claims data, Q4 Non-Farm Productivity and unit labor costs data updates. While a better than expected US macro data outcome could help USD bulls erase losses incurred in earlier session, it is unlikely for bulls to gain strong support enough to breach previous session highs and make another solid bull run as investors await tomorrow’s US Non-Farm Payroll update for directional cues and are unlikely to place any major bets ahead of the release of same. Moving forward, the path with least resistance is towards upside but pair lacks a clear directional bias which suggests range bound action is likely to continue for rest of the day’s trading session.

Please let us know what you think in the comments below.

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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