USD/CAD Price Forecast – Loonie Gains Momentum As Investors Focus on U.S-China Tariff Update

US Dollar saw loss in momentum across major global currencies shortly after US Fed Rate decision. FOMC meeting update was in line with expectations as the policy markets announced rate hike and a hawkish prediction for future signaling two more rate hikes by the end of this year. However all strength that the US Greenback had before FOMC meet was slowly draining post the interest rate decision as news hit market that “ U.S. President Donald Trump is set to meet with top advisors to discuss levying tariff on goods imported from China as early as Friday”. China being a major trading ally of US contributes to billions of dollar in trade relations and this has caused fear among investors causing them to flock towards safe havens there by resulting in US Greenback seeing decline against major global currencies.

USDCAD Falls on Weak Dollar

The pair extended overnight sharp retracement from one week high level of 1.3052 and continues to be weighed down by a softer tone surrounding the greenback. Currently trading around the 1.2953 region, within striking distance of weekly lows, a subdued action around crude oil prices did little to influence demand for the commodity-linked currency – Loonie, with the USD price dynamics acting as an exclusive driver of the pair’s momentum through the early European session. Moving ahead, focus now shifts to the US economic docket, highlighting the release of monthly retail sales data, which might help traders to grab some short-term opportunities.

Macro calendar has been silent in Canada for first three days of the week. Today both Canadian and U.S markets are set to see house price index data in their respective markets. US market saw positive activity in yesterday’s macro data release despite the data have little to no impact on US Greenback’s momentum yesterday. Crude Oil weekly stockpile data and Core PPI data both saw better than expected results in US market yesterday. There is a high level of weakness surrounding 1.29 handle and if this price level is breached the pair is likely to see accelerated fall towards 1.2920-15 intermediate zone en-route the 1.2900 handle and 1.2875-70 support area. On the upside, any up-move might now confront resistance near the 1.30 handle, above which the pair could make a fresh attempt towards retesting June monthly highs resistance near the 1.3065 region.