Canadian Dollar Price Outlook: USD/CAD Breakout Not Yet Confirmed
Canadian Dollar (CAD) Price, Chart and Analysis:
- USD/CAD touching recent trend and battling with the 200-day moving average.
- The Bank of Canada rate decision next week now looks like the key driver.
USD/CAD Price Looking for the Next Move
Next week sees the latest Bank of Canada (BoC) interest rate decision (September 4) with the market currently expecting rates to remain steady at 1.75%, although markets are starting to look at the possibility of a 0.25% rate cut as global trade risks grow. One 25 basis point interest rate cut is fully priced-in by December. At the last BoC meeting, the central bank admitted that the economy’s outlook ‘is clouded by persistent trade tensions’ and that trade conflicts between the US and China are curbing business activity and investments and weighing on commodity prices. Next week’s meeting may help decide the near-term direction of USD/CAD.
The price of US crude oil has fallen around 8% from the July 10 BoC meeting and the recent set of lower highs remain intact, while the 200-day moving average currently blocks upside momentum.
US Crude Oil Daily Price Chart (January – August 23, 2019)
The next US FOMC meeting is on September 17-18, and another 0.25% rate cut is fully priced-in and expected. Keep up to date with all key economic data and event releases via the DailyFX Economic Calendar
USDCAD is currently trading either side of the recent uptrend, started in mid-July, and will need a driver to for the pair to make a decisive move. Price action is centered around 1.3300, the recent uptrend and just above the 200-day moving average, currently situated at 1.3290, and the 20-day moving average at 1.3278. A break above, or rejection from, the trend line will signal the near-term outlook for the pair. To the upside, 1.3346 before 1.3433 and to the downside, last Tuesday’s low at 1.3225, the 1.3180 area before 1.3113.
USD/CAD Daily Price Chart (January – August 28, 2019)
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