USD/CAD Daily Price Forecast – USD/CAD on Downward Price Action As Crude Oil Price Action Dictates Momentum

The USD/CAD pair came under some renewed selling pressure on Monday, with bears now eyeing a follow-through weakness below the 1.3200 handle. The pair traded with a negative bias for the third session in the previous four and has now moved within striking of Friday’s swing low, touched in a knee-jerk reaction to upbeat Canadian macro data – consumer inflation figures and monthly retail sales data. A strong rebound in crude oil prices underpinned demand for the commodity-linked currency – Loonie and turned out to be one of the key factors exerting some fresh downward pressure at the start of a new trading week.

Subdued USD Demand Does Little To Limit Downside Move

In fact, WTI crude oil rallied over 1.5% and moved back above the $51.00/barrel mark to recover a part of Friday’s nearly 8% plunge, triggered by concerns that surging supply and slowdown in demand growth could create a glut next year. Meanwhile, a subdued US Dollar demand did little to influence the price action or lend any support, with oil price dynamics acting as an exclusive driver of the pair’s negative momentum at the start of a new trading week. As of writing this article, USD/CAD pair is trading at 1.3203 down by 0.26% on the day. On release front, Canadian calendar has no releases for the day while US calendar will see release of Chicago Fed national Activity and Dallas Fed Mfg Business Index data but neither is expected to have any major impact on price action of the par today.

Looking from technical perspective, the daily chart indicates that pair is still in path of bull momentum but seems to have found some stability above 1.3185 handle in short to medium term. A follow-through weakness below the 1.3185-80 region is likely to accelerate the fall towards 1.3130-25 intermediate support en-route the 1.3100 round figure mark. On the flip side, the 1.3230 horizontal zone, closely followed by the 1.3255-60 region, might continue to act as an immediate resistance, above which the pair is likely to aim towards reclaiming the 1.3300 round figure mark.