USD/CAD Daily Price Forecast – USD/CAD Trade Positive for Seventh Consecutive Trading SessionSurging US bond yields supportive of the prevalent USD bullish move while Pickup in oil prices underpin Loonie and seemed to cap strong gains.
The USD/CAD pair traded with a mild positive bias for the sixth consecutive session, albeit remained well below overnight swing high level of 1.3010. After yesterday’s late retracement from levels beyond the key 1.30 psychological mark, or over one-week tops, the pair caught some fresh bids on Tuesday amid renewed US Dollar buying interest supported by the ongoing upsurge in the US Treasury bond yields. As of writing this article, the pair is trading at $1.2995 up 0.23% on the day. Firming prospects for gradual Fed rate hike through the end of this year, and beyond, pushed yields on the benchmark 10-year government bond to a fresh multi-year high level of 3.261% and remained supportive of the prevailing bullish sentiment surrounding the greenback.The uptick, however, lacked strong conviction/follow-through and was being capped by a goodish pickup in crude oil prices.
USD Likely To Retain Upper Hand in Immediate Future
In fact, WTI crude oil climbed back closer to the $75.00/barrel mark, which underpinned the commodity-linked Loonie and eventually kept a lid on any meaningful up-move for the major. It would now be interesting to see if bulls are able to maintain their dominant position or the pair continues with its struggled to build on/sustain strength above the 1.30 handle amid absent relevant market moving economic releases. On NAFTA updates, the agreement will be a moderate tailwind for the MXN thanks to trilateral trade factors that see Canada unlikely to be left out of the ratified agreement and positive updates could also see the CAD continue higher, with the writing of the USMCA coinciding with an already-expected rate hike by the BOC in the works.
When looking at the pair from technical perspective, A one-week ascending channel has guided the movement of the US Dollar against the Canadian Dollar. The currency pair bounced off its lower boundary on October 1 and followed by a short-term upside wave. The 50-hour simple moving average at 1.2960 was providing support for the exchange rate during the morning hours of Tuesday’s trading session. Furthermore, technical indicators on the 4(H) time frame suggest that the bullish sentiment is likely to continue within the following trading session. The 1.3000-1.3010 region might continue to act as an immediate resistance, above which the momentum could further get extended towards the 1.3040 supply zone. On the flip side, the 1.2950 region now seems to protect the immediate downside, which if broken is likely to accelerate the fall back towards the 1.2900 round figure mark.