Yahoo Finance USD/CAD Daily Price Forecast – USD/CAD Limits Downside Move on Softer Crude Oil Price As Investors Focus on BOC Rate Decision
The USD/CAD pair quickly reversed a brief dip to daily lows near 1.3080 regions, now looking to take on the recovery above the 1.31 handle. However, it remains to be seen if the spot can sustain the bounce amid persisting risk-off market environment. Risk-off remains at full steam in Europe amid ongoing uncertainty over the Italian budget, Brexit deal and the US-Saudi tensions that knocked-off the USD/JPY pair. As a result, the US dollar slipped from two-week tops versus its main peers, dragging the USD/CAD pair lower. As of writing this article, the USD/CAD pair is trading at 1.3106 up 0.04% on the day. Further, a 3% slump in the Turkish Lira vs. the greenback adds to the offered tone around the spot. However, the losses appear capped amid the renewed weakness seen around oil prices while expectations of a 25bps rate hike to be announced by the Bank of Canada (BOC) tomorrow also keeps the Loonie somewhat underpinned.
BOC Likely To Raise Rates Only 3 More Time
In the meantime, the broader market sentiment and US dollar dynamics will continue to drive the USD/CAD price-action ahead of the Wall Street open and Fed speaks. Aside from speech by FOMC member Kashkari, US calendar remains silent for the day and Canadian calendar also remains silent with no macro data update scheduled to release today. CAD OIS implies over a 90% chance of a 25bp hike and analysts surveyed by Bloomberg are unanimous in calling for a move. This decision will be accompanied by a new Monetary Policy Report (MPR) with updated projections and there will also be a press conference. Including this week’s move BOC is expected to raise rate by max of 3 more times post which the central bank is expected to hold rates steady as the backdrop sours.
From technical perspective, the USD/CAD pair is trading at 1.3100; the instrument is moving above Ichimoku Cloud, thus indicating an ascending tendency. The markets could indicate that the price may test Tenkan-Sen and Kijun-Sen at 1.3055 and then continue moving upwards to reach 1.3185. Another signal to confirm further ascending movement is the price’s rebounding from the support level. However, the scenario that implies further growth may be cancelled if the price breaks the downside border of the cloud and fixes below 1.2965. In this case, the pair may continue falling towards 1.2855.
This article was originally posted on FX Empire
