USD/CAD Daily Price Forecast – USD/CAD Tests New Monthly Lows on Broad based USD Sell-Off

Traders shrug off NAFTA uncertainties amid fresh USD selling while bullish oil prices underpin Loonie and exert additional pressure.
Colin First

After an initial uptick to 1.2990 levels, the USD/CAD pair met with some fresh supply and was seen extending overnight sharp retracement slide from a multi-day high level of 1.3065. On Tuesday, the pair struggled to sustain early up-move beyond the 100-day SMA and was being weighed down by a combination of factors – upbeat Canadian manufacturing sales and bullish crude oil prices. The pair weakened back below the key 1.30 psychological mark and kept losing ground through the early European session on Wednesday, shrugging off the uncertainties surrounding NAFTA negotiations. As of writing this article, USD/CAD pair is trading at 1.2945 down 0.22% on the day. Meanwhile, the US Dollar failed to capitalize on overnight goodish rebound from near seven-week lows and rather seemed unaffected by the ongoing upsurge in the US Treasury bond yields.

Oil Price Supports Canadian Loonie While USD Continues To Grow Weak on Sell Off Activity

In fact, yields on the benchmark 10-year bonds rose further beyond the 3.0% mark but did little to revive the USD demand and stall the pair’s ongoing downfall to fresh monthly lows.  The pair has now lost over 110-pips over the past 24-hours and now seems poised to continue with its bearish price action as traders now look forward to the US housing market data – building permits and housing starts, for some immediate respite for the bulls. The US and Canada continue to exchange sharp words over trade as NAFTA talks resume. According to Bloomberg, Representative Steve Scalise of Louisiana warned that patience for Canada was “wearing thin”, while Canadian Prime Minister Justin Trudeau continues to reiterate that he’d rather have no deal at all than a deal that is detrimental to Canada.

Thursday is being considered the deadline to submit any official paperwork leading to an agreement, before yet another self-imposed ‘deadline’ sails by with no agreement in place. A tentative deal was initially reached with Mexico in August, though despite President Donald Trump threatening to go ahead and redraft NAFTA with just Mexico, the US Senate has stopped short of backing up Trump’s statements, especially after Mexico has warned that it has no interest in a NAFTA deal without Canada. A follow-through selling pressure has the potential to continue dragging the pair further towards the 1.2900 handle en-route the very important 200-day SMA support near the 1.2865 region. On the flip side, the 1.2995-1.3000 region now becomes immediate strong hurdle and any subsequent up-moves might be capped at 100-day SMA hurdle near the 1.3045-50 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
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.
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.