USD/CAD Daily Price Forecast – USD Breached 1.33 Handle on Disappointing Canadian Macro Data

The USDCAD pair has been trading in wavy formation over last 24 hours. Upbeat US CPI update helped US Dollar regain positive momentum in late European market hours yesterday. US Dollar continued trading positive across American market hours. The pair gained further positive momentum during Asian market hours as investor sentiment turned cautious ahead of today’s Sino-U.S. trade talks. However, comments from U.S. President Donald Trump who mentioned that he was satisfied with progress in trade talks so far and given current scenario he was willing to extend deadline from March 1^st to another 60 days in hopes of seeing the positive resolution of trade talks inspired another fresh wave of bullish action in the crude oil market.

Crude Oil Price Declining Later in The Day Added Serious Blow To Loonie Bulls

This caused crude oil price to rise high in market breaching $53 handle per barrel as positive resolution would lead to increased demand from China which is biggest importer of crude oil in global market and demand from China is expected to boost crude oil price. Canadian Loonie being a commodity-linked currency, stalled US Greenback’s momentum in broad market as positive price action in crude oil market underpinned CAD bulls. However, Dollar remained strong in the broad market and had resumed its positive price action from earlier this week and this helped prevent further declines. Later in the day, disappointing US macro data gave the pair some leeway, but disappointing Canadian macro data which came shortly weakened Loonie in the broad market.

Crude oil price also fell in the spot market during late European market hours. This caused Loonie to lose grip on price action resulting in US Dollar gaining upper hand. The price then skyrocketed above 1.33 handle where the pair has maintained a consolidative price action. When looking from a technical perspective, the pair with least resistance is to the upside as price action is currently well above 20, 50 & 100 MA’s in intra-day charts and price has scaled critical resistance at 1.33 handle making it strong support to the downside in immediate future. Further momentum indicators RSI & Stochastic are moving near the overbought region in intra-day and daily chart supporting further positive price action in immediate future.

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