USD/CAD Daily Price Forecast – The Pair Trades Rangebound Amid Holiday Thin Market

Given three consecutive trading sessions of positive price action in crude oil market CAD had managed to limit USD’s upside move across last week. However, owing to dollar’s strength in the broad market the pair had managed to maintain positive price action across last week. But the pair saw bearish breakout on Friday during American market hours as Dollar weakened in the broad market owing to disappointing macro data from the USA. Further headlines hit the market that US President Donald Trump had declared a state of national emergency in a bid to overpower congress and divert government funds allocated for defense purpose towards building a border wall between US & Mexico.

Crude Oil’s Positive Price Rally Underpins CAD Bulls

This move created additional bearish pressure for US Greenback in broad market cementing USD’s dovish position in the broad market on Friday. Both Canada & U.S. markets are closed today on account of national holiday celebrations. There are no macro calendar updates from either country as well. This has lead to a scenario of subdued price action in the global market today. Crude oil gained positive momentum today and broke past critical price levels with spot prices moving above $56 per barrel. This has resulted in price action moving in favor of Canadian Dollar during the Asian and European market hours. As of writing this article, USDCAD pair is trading at 1.3227 down by 0.16% on the day.

Canadian Loonie being a commodity-linked currency gained positive price action owing to the positive performance of crude oil in the global market. Given the fact that state of emergency declared in the U.S. is yet to be resolved dollar is likely to trade dovish in broad market in near future. This combined with positive crude oil price in the broad market is likely to influence further downside action in the broad market once usual trading activity resumes tomorrow. Moving forward, the pair needs to breach support at 1.3225 & 1.3210 handle for CAD to establish solid rally in its favor while the pair need to breach the resistance near 1.3253 & 1.3269 handle to the upside for US Greenback to resume its positive price rally.

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