USD/CAD Daily Price Forecast – USD/CAD Trade Range Bound Above 1.32 Handle

The USDCAD pair slide to new one week lows during Pacific-Asia market hours earlier today. This move in favor of Canadian Dollar was inspired following US API crude oil stockpile data which saw draw in inventory stockpile. This combined with increased risk appetite in the broad market, profit booking activity in the broad market following seven consecutive sessions of positive USD rally and US dollar index moving back to 96 handle served as a combination of factors that influenced downward price action. Further news reports hit the market that US President Donald Trump is open to waiving March 1^st deadline in case the trade talks show potential for the possibility of a trade deal between two nations.

US Crude Oil Data Supports CAD Bulls

This greatly improved risk appetite in the broad market as Sino-U.S. trade war was one of the main reasons which dragged the global economy down the pit. The positive resolution of a trade deal will improve investor sentiment in the broad market and lead to global economy moving back up the ladder. Further, given the fact that China is the biggest importer of crude oil, positive resolution of trade talks will lead to increased imports in China resulting in higher demand for crude oil which is expected to push up crude oil price in the broad market. Canadian Loonie being a commodity-linked currency, a hike in Crude Oil price will be positive for CAD in the broad market. As of writing, this article USDCAD pair is trading at 1.3231down by 0.20% on the day.

While pair hit one-week lows earlier in the day at 1.3195, it recovered ground during mid to late European market hours and settled above 1.32 handle where it is trading in consolidative action. Investors now await headlines pertaining to tomorrow’s trade talks for further cues while the pair is expected to continue range-bound price action for rest of the day. When looking from a technical perspective, the pair lacks directional bias given the fact that bulls and bears have equal strength in the market. To the upside, immediate resistance is at 1.3265/70 handle followed by 1.3300 handle while support on the downside is at 1.3200 followed by 1.3240/35 handle respectively.