USD/CAD Daily Price Forecast – The Loonie Pair Recovers Previous Losses Ahead Of US Q4 GDP Results

The Loonie pair started the Thursday morning session with some red candles down the line reaching the lower vicinity of 1.3399 levels. The plunge was due to the decline in the global bond yields with increasing recession fears with major banks taking a dovish growth outlook.

The pair fall worsened when the crude prices started plummeting. The Crude Oil prices started correcting after the announcement of the increase in the US crude oil inventories. This news elevated the supply side, sufficing the demand end and lowering the oil prices for the second day in a row. Brent Oil futures were trading at $67.55 per barrel, 28 cents down to the last closing. US West Texas Intermediate (WTI) crude futures were priced at $59.21 per barrel, 20 cents lower to the previous closing.

“Today’s fall does not derail the short-term bullish argument that both the OPEC+ production cuts and supply outages will outweigh the global growth concerns and rising U.S. production,” said Edward Moya, senior market analyst, OANDA.

At the time of writing this article (11:59 GMT), the pair was trading at 1.3427 level.

Upcoming Significant Event: US GDP for the fourth fiscal quarter

There is no as such Canada specific significant event happening during the day. But traders must have a close watch on the US Gross Domestic Product (GDP) numbers for the fourth fiscal quarter. US Bureau of Economic Analysis (BEA) will release the results at 12:30 GMT. The US GDP numbers are reported after one initial reporting and two revisions. But this quarter, due to the government shutdown in the months of December and January, the BEA will directly come up with the results skipping the revisions part.

US GDP for the second quarter was 4.2 percent and for the third quarter was 3.4 percent. This time the consensus estimate a 2.6 percent rise which portrays a downtrend in the overall picture. Poor Retail sales numbers further support the consensus bears. Any more change (decline) in the fourth fiscal quarter figures will have a massive impact on the Loonie pair.

Technical Overview

The USD/CAD pair was seen to trade above the Simple Moving Average (SMA) for the multiple days. This position of the loonie pair depicts a bullish stance for its upcoming movement. The Relative Strength Index (RSI) was seen to lie within the desired range of 30 and 70 points, albeit had a slight overbuying signal at around 08:25 GMT the pair was up-trending. The pair had already hit the resistance level of 1.3439. There seems more juice left in the USD/CAD.