Skip to content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
USD/CAD Forecast: Canadian Dollar Recovers with Crude Oil Price

USD/CAD Forecast: Canadian Dollar Recovers with Crude Oil Price

Rich Dvorak, Analyst

CANADIAN DOLLAR FORECAST: USD/CAD PRICE EDGES LOWER AFTER REJECTION AT RESISTANCE, CRUDE OIL REBOUNDS

  • Spot USD/CAD price action comes under pressure after failing to top a major technical resistance level
  • The Canadian Dollar selloff stabilizes as negative crude oil prices turn positive
  • USD/CAD could snap back higher if coronavirus-battered economic data on deck for release recharges US Dollar demand

USD/CAD comes under fire as the Canadian Dollar rebounds with crude oil prices. Spot USD/CAD price action has drifted lower by more than 100-pips since Monday’s swing high and coincides with a rejection near the 1.4200 handle.

USD/CAD has notched a series of lower highs since the March 18 peak, but the major currency pair also seems to have formed a short-term trendline of support connecting the April 13 and April 20 lows. As such, spot USD/CAD looks relatively confined between the 23.6% Fibonacci retracement level and mid-point of its recent bearish leg.

USD/CAD PRICE CHART: 4-HOUR TIME FRAME (16 MARCH 2020 TO 22 APRIL 2020)

USDCAD Price Chart US Dollar to Canadian Dollar Forecast Crude Oil

Perhaps high-impact economic data on deck for release later this week, like jobless claims and flash PMIs from IHS Markit due Thursday, might catalyze the next big move in USD/CAD. On that note, spot USD/CAD price action has potential to spike back toward month-to-date highs if another wave of risk aversion pushes traders into safe-haven currencies and boosts US Dollar demand.

Conversely, market participants may remain forward looking and continue the influx of coronavirus optimism as COVID-19 lockdowns come to an end and guidelines are outlined for restarting economic activity. This could facilitate a protracted drift lower in USD/CAD as the Canadian Dollar recovers with crude oil prices and general risk appetite.

Keep Reading – US Dollar & VIX Index Climb; Stock Market Rally at Wits End?

-- Written by Rich Dvorak, Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES