USD/CAD Daily Price Forecast – USD/CAD To Rangebound Near Mid 1.31 Handle

USDCAD pair yesterday traded range bound in early hours but saw sharp declines during American market hours as political woes pressured dollar into sharp decline in the broad market. While positive crude oil price continues to underpin Canadian Dollar in the broad market, yesterday’s bearish breakout was influenced by headlines flowing from the U.S.A. As trading session resumed for the week, protests occurred across the nation with nearly 16 states filing a lawsuit against US President Donald Trump over abuse of power as he declared a national emergency to divert funds for border wall while clearly there was no such emergency. This lead to the pair breaching multiple support price levels mentioned yesterday resulting in CAD managing to gain upper hand.

Fed Meeting Minutes To Provide Directional Cues

Further, the decline in US government bond yields in the broad market also weighed down US Greenback in the broad market. But downside price action has been capped well above mid-1.35 handle for now as optimism surrounding Sino-U.S. trade talks and headlines which continues to suggest positive progress continues to underpin dollar to some extent. Trade talk progress also underpins crude oil price in the broad market. Production cut enforced by OPEC & U.S. sanctions on Venezuelan and Iranian crude oil continues to underpin positive price action of crude oil. But data from the US which hints at shale production and output from the US remaining near record high prevents crude oil price from seeing sharp gains resulting in range bound action.

As of writing this article, the USDCAD pair is trading at 1.3161 down by 0.65% on the day. The pair continues steady downside move across the day but faces strong support at mid-1.31 handle. While the Canadian calendar remains silent, investors await updates from the US market for directional cues. US calendar sees the release of API weekly crude oil stockpile and Fed meeting minutes for the month of January. If the report confirms dovish stance of Fed on rate hike plans for 219, the pair will see a sharp decline during Pacific-Asian market hours ahead of which price action is expected to remain range bound. Expected support and resistance for the pair are at 1.3150, 1.3100 and 1.3195, 1.3215 respectively.

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