USD/CAD Daily Fundamental Forecast – October 24, 2016

USDCAD finally broke the range top, something that we have been waiting for a few weeks now. For the past few weeks, the pair had been consolidating between 1.3000 and 1.3300 while we continued to maintain the stance that the Canadian economy was weakening and hence this pair was ripe for the uptrend to continue. Even the strong data from the US and Canada and the rising oil prices did nothing to shake the pair out of its range but the back breaker, or should we say the range-breaker, came from the man himself, the BOC Governor Carney, who hinted that rate easing was something that the BOC did discuss and that it is something that could be on its way in the near future.

This hint was enough for the pair to break from its slumber as it began to realise its true worth and seemed destined to make up for lost time but even then 1.3300 remain unbroken. The break came after the release of the core retail sales data from Canada which came in weaker than expected and this was enough signal for the market to break through its range and head for its uptrend and the pair at 1.3500 as we write this. We believe that the pair is well on its way to 1.3500 in the short term and then 1.4000 in the medium term and those who picked the longs at near the range bottoms should be happy if they had the strength to continue to hold it all through the consolidation and the ranging over the past few weeks.

Looking ahead to today, we do not have any major economic news to be released from the US or Canada for today but we have the BOC Governor Carney speaking early morning tomorrow and it remains to be seen whether he adds to what he has already said and continues to hint about rate cuts. Tighten your seat belts and hold on to the uptrend. The trend is surely your friend.