USD/CAD Daily Price Forecast – USD/CAD Trades Flat Ahead of US CPI Update

USD held on the defensive against its Canadian counterpart, with the USD/CAD pair trading with a slightly negative bias for the second consecutive session. The pair continued with its struggled to sustain/build on the momentum further beyond the 1.3400 handle despite the prevailing bullish sentiment surrounding the US Dollar. The greenback stood tall near one-month tops and was now supported by rebounding US Treasury bond yields, though failed to provide any meaningful bullish impetus to the major. As of writing this article, the USD/CAD pair is trading at 1.3377 down by 0.10% on the day. A goodish rebound in crude oil prices underpinned the commodity-linked currency – Loonie and seemed to be the only factor exerting some downward pressure through the early European session on Wednesday.

A goodish pickup in oil prices underpin Loonie

In fact, oil prices rallied over 1.5% on Wednesday amid news of disruptions to Libyan oil exports and a production loss of 315,000 bpd from the El Sharara oilfield after it was seized by a local militia group. While investors expect short term opportunity to come from macro data updates, Canadian calendar has no major impact release scheduled for the day while US market will see release of Core CPI data and Crude oil inventories data – the outcome of which usually affects global crude oil price action indirectly affecting Canadian Loonie’s price in broad market. The pair is expected to continue its range bound price action ahead of US market hours as increased risk appetite in market has caused risky assets to be bid across the day undermining demand for USD in broad market.

When looking from technical perspective, the US Dollar is currently in consolidative price action above mid 1.33 handle against the Canadian Dollar while technical indicators signal that that a strong bullish momentum is likely to come into play during the following trading session. In case of bullish breakout, the 1.3400 handle remains an immediate strong hurdle, which if cleared might assist the pair to aim back towards retesting 18-month tops, around the 1.3445 area. On the flip side, immediate support is pegged near the 1.3355-50 region, below which the pair is likely to accelerate the fall further towards challenging the 1.3300 handle.