USD/CAD Daily Price Forecast – USD/CAD on Bull Run as Loonie Turned Dovish Post BOC’s Cautious Remarks in the Policy Statement

USD/CAD headed to highest daily close of the year after hitting 20 month high.
Colin First
USDCAD Thursday

The USDCAD pair began its bull run during us market hours last night and hit 20 month high during European market hours today. The Bull Run was triggered post dovish comments from BOC’s MPC statement yesterday. While BOC left its policy rate unchanged at 1.75%, the bank adopted a very cautious tone in its statement as it drew attention to the negative impacts of falling oil prices on Canada’s energy sector and the inflation growth in its statement. They noted that economic momentum was slowing into Q4, and perhaps most tellingly stated that there was more room for non-inflationary growth. Additionally, contradicting headlines surrounding an additional OPEC+ oil output cut and tepid price action in crude oil market ahead of OPEC summit made it difficult for Loonie to find bid in market.

BOC leaves policy rate unchanged at 1.75% as expected

This resulted in US Greenback gaining upper hand despite subdued demand in broad market and falling US treasury yield spread which threatened to weaken US Greenback’s broad based strength and momentum in medium to long term outlook. As there was a lack of major impact news and US Greenback saw steady bid action and was further supported by a fresh wave of global risk-aversion trade, triggered by reviving fears of a further escalation in tensions between the US and China. The pair saw its steady upward price action moving well above 1.34 handle and is currently trading at 1.3432 up by 0.57% on the day. On release front, both sides of pair have high impact macro data release scheduled during American market hours. Canadian market will see the release of Ivey PMI data while US markets see the release of ADP Non Farm Payroll data, ISM Non Manufacturing PMI data, Markit Composite PMI & Services PMI data and Crude Oil Inventory data.

When looking from technical perspective, the USD/CAD pair extended its recent upsurge for the three consecutive sessions. Possibilities of some short-term trading had stopped being triggered as the pair managed to sustain its break through the 1.3400 handle steady across European session so far. A follow-through buying has the potential to continue lifting the pair further towards the 1.3480 intermediate resistance en-route the key 1.3500 psychological mark. On the flip side, the 1.3400 handle now seems to protect the immediate downside and is followed by previous strong resistance, now turned support near the 1.3360-50 region.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US