USD/CAD has been quite impulsive with the bullish gains which lead the pair to reside inside the price range of the 1.2800-1.2900 area. Despite the mixed economic reports on the USD published recently, it gained good momentum due to worse economic report on the CAD.
Ahead of the upcoming CPI and Core Retail Sales reports to be published this week on the CAD side, today CAD Manufacturing Sales report is going to be published which is expected to decrease to 1.1% from the previous value of 1.9% and Governor Council Member Schembri is going to speak today that is expected to have high impact on the gains of CAD in the coming days.
On the other hand, today USD Building Permits report is going to be published which is expected to be unchanged at 1.35M, Housing Starts is also expected to be unchanged at 1.32M, Capacity Utilization Rate is expected to have a slight increase to 78.4% from the previous value of 78.0% and Crude Oil Inventories is expected to show less deficit at -1.1M from the previous figure of -2.2M. Additionally, FOMC Member Bostic is going to speak today about the upcoming interest rate decision and monetary policies that is expected to be quite neutral in nature.
As of the current scenario, USD has been forecasted to have mixed economic reports, whereas CAD is expected to continue struggling with the series of worse economic reports. The market sentiment is currently expected to favor USD in the coming days, whereas certain positive economic reports on the USD side to be published may lead to further bullish pressure in the future as well.
Now let us look at the technical view. The price is currently residing inside the corrective range of the 1.2800-1.2900 area, where the price has been struggling for days earlier. The recent bullish momentum was quite impulsive, but yet for a certain possibility of further bullish pressure in the pair, a daily close above 1.2900 area is needed. As the price breaks above the 1.29 area with a daily close, further bullish momentum with target towards 1.30 is expected and later if that is also taken out with a daily close, the price is expected to push much higher towards the 1.3120 key level area in the coming days. As the price remains above 1.28 with daily close, the bullish bias is expected to continue further.
