USD/CAD Daily Price Forecast – Loonie Pair Recovers In The Middle Of Uprising Crude Prices

During the early hours, the USD/CAD rose for some time recovering yesterday’s losses amidst a positive USD index. The scene got reversed when crude prices started uplifting. The price hike was due to a second major blackout in Venezuela and rising concerns over a global economic slowdown. By 05:10 GMT, US Crude Oil WTI Futures reached $60.04 per barrel, and Brent Oil Futures stood near $67.60 per barrel.

By mid-day, the USD/CAD broke the resistance level of 1.3406. On the downside, the pair bounced back from the lower vicinity near 1.3374 level. At the time of writing this article (11:18 GMT), the loonie pair was trading at around 1.3404 level.

Oil Prices Underpinned The Loonie Pair

Crude prices are highly significant while tracking the commodity-linked USD/CAD currency pair. The main concerns revolving around the crude oil currently are the US Sanctions on certain oil-producing countries like Iran, Venezuela, etc., OPEC crude supply cut, world economic sluggishness and significant events like US-Sino trade war. These events are still on the go perhaps with lesser chances of getting resolved in the near term.

“The global growth and data concerns that drove the downside moves over the last few days are still with us, and investors will be looking for fresh reasons for the market to rally further over the next few sessions,” analysts from Rakuten Securities Australia said in a note that was cited by CNBC.”

USD/CAD Things To Keep An Eye On

By 12:30 GMT, A Medium Volatile Event suspected to have a notable impact on the USD/CAD is about to occur. Statistics Canada will release the International Merchandise Trade for January. This report will reveal the trade deficit of the country which excludes intangibles. Canadian economic outlook will be dependant on these numbers. The Consensus estimate a $-3.50 Billion as compared to the previous $-4.59 Billion.

Crude Prices also uplifts with Global Growth concerning significant events. Today by 19:30 GMT, the MPs of the House of Commons of United Kingdom will vote on the alternatives to the May’s deal for a Brexit. The MPs will have ballets named with the particular alternative which includes even the May’s deal with some improvements, a Second referendum, Article 50, and many more offers. The decision will have a major impact on the global growth outlook. All the major currency pairs including the loonie pair will share the outcome of today’s UK parliamentary voting.

Technical Overview

USD/CAD broke the major resistance level of 1.3405 reaching fresh highs during the day. The pair lied above the Simple Moving Average (SMA) for the major days signifying a bullish stance on the pair’s movement. The loonie pair had tried hard to cap the downside with a support level of 1.3378. The candles seem to possess a strong upside pull creating hope for the USD/CAD to end the day on a positive note.