USD/CAD Daily Price Forecast – USD/CAD On Consolidation Action Post Overnight Decline

USDCAD pair saw two-way price action over the last 24 hours on news driven momentum. While USD had been gaining positive price action across the week owing to risk-averse trading activity, news hit the market last night that US officials were considering reversing tariff’s on Chinese import goods in order to hasten a trade deal between two nations and also reduce the impact of trade war on US economy. This news improved risk appetite across all major global market as key events that inspired caution among investors had come to pass and hopes of a positive outcome in trade deal during Vice Premier Liu He’s visit to the US later this month.

Crude Oil Price Rebound Underpins Loonie Bulls

However, news soon hit the market which stated that treasury department had denied considering the notion of tariff reversal on Chinese goods. Conflicting headlines put an end to sharp gains as investors held back from placing major bets choosing to wait for further headlines with more details on trade talk progress. However, optimism on possibility of a positive outcome in trade negotiations between the two nations helped sustain bullish rally across both Asian and European markets. Further Crude Oil also gained in the broad market supported by increased risk appetite and trade talk optimism as OPEC’s production/supply cut has helped oil price find support above $50 per barrel preventing sharp declines.

Being a commodity-linked currency (crude oil), Canadian Loonie gained upper hand against USD and extended overnight slide. But bulls lacked fundamental strength to sustain a rally in Loonie’s favor resulting in rebound from intra-day lows. However, USD is weighed down by the partial government shutdown in US markets and dovish Fed stance resulting in neither side managing to gain upper hand against each other. When looking from a technical perspective, intra-day charts show consolidative action which suggests that the pair could continue consolidative action near mid 1.32 handle for rest of the day’s trading session. Expected support and resistance for the pair in immediate future are at 1.3264, 1.3248 and 1.3275, 1.3285 respectively.