The USDCAD pair yesterday saw range bound action price action for the majority of the day as crude oil price remained strong in the broad market while US Dollar was weak in the broad market following the release of disappointing US jobs data last Friday. However, better than expected the US retail sales data helped the Greenback gain some ground against Canadian Dollar during American market hours. The recovery was short-lived as US Dollar weakened in the broad market following reports of EU Juncker’s concessions to PM May’s Brexit deal just ahead of UK Parliament vote boosted risk appetite across the globe.
Positive Crude Oil Price Underpins CAD bulls
As crude oil price remained high in broad market for third consecutive trading session today and US dollar weakened, Canadian dollar regained positive price action and traded range bound across Asian session and the majority of European market hours. Canadian dollar being a commodity-linked currency gains momentum whenever crude oil price trades positive in the broad market. Crude oil has been trading positively for the last three consecutive trading sessions and price per barrel went well near monthly highs above $57 and this helped Loonie maintain a steady bearish bias in range-bound price action ahead of US macro data update.
Macro calendar schedule is silent on Canadian side until Thursday leaving price action to be controlled by USD price dynamics and crude oil price action in the global market. US economic calendar will see the release of US CPI data and a speech from FOMC member Brainard in late European/early American market hours and US API weekly crude oil stockpile data in Pacific-Asian market hours. When looking from a technical perspective, the ongoing bearish price rally also viewed by a few as corrective price rally is approaching its last leg. For a majority of the day, the pair has been struggling between 1.3415 and 1.3395 price range. Moving forward, the pair needs a clear break above 1.3415/25 handles to establish USD’s dominance in price action while a break below 1.3395/85 is required for CAD to establish dominance over price action in immediate and near future trading sessions.
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This article was originally posted on FX Empire