Yahoo Finance USD/CAD Daily Price Forecast – USD/CAD Range Bound Above 1.295 Handle on Firm US Greenback in Broad Market
The USD/CAD pair regained positive traction on Wednesday and recovered a part of the previous session’s sharp fall to over one-week lows. The Bank of Canada’s Business Outlook Survey, released on Monday, continued underpinning the Canadian Dollar and kept exerting downward pressure on the major for majority of Tuesday. However, a late US Dollar rebound, which extended through the Asian session on Wednesday, helped find decent support ahead of the 1.2900 handle and was seen as one of the key factors driving the pair higher. Meanwhile, a positive tone around crude oil prices, which tend to underpin demand for the commodity-linked currency – Loonie, might now contribute towards capping any meaningful up-move, at least for the time being.
FOMC Update Will Be Deciding Factor of Directional Movement of Pair in Near Future
As of writing this article, the USDCAD pair is trading at 1.2975 up by 0.31% on the day. Moving ahead, today’s economic docket, featuring the release of US housing market data and Canadian Manufacturing Sales, will now be looked upon for some short-term trading opportunities during the early North-American session. However FOMC minutes update from US market remains main focus of investors as forward guidance to be revealed in update today will decide the directional movement of the pair for rest of the week. Canadian economy looks positive in near term as per recent business survey data which showed that Companies are reporting increased investment and hiring.
Investors are also focused on BOC which is expected to raise rates by a quarter point which would match the Fed rate hike in September. When looking from technical perspective, momentum seems in favor of USD in near future. Any subsequent up-move beyond 1.2970 levels is likely to confront stiff resistance near the key 1.30 psychological mark, above which the pair is likely to accelerate the momentum towards 1.3040-45 supply zone. On the flip side, the 1.2935 level now seems to protect the immediate downside, which if broken might turn the pair vulnerable to head towards the very important 200-day SMA support near the 1.2900-1.2895 region.
This article was originally posted on FX Empire
