USD/CAD Fundamental Forecast – September 30, 2016

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Published: Sep 30, 2016, 01:01 UTC

It was a day of consolidation for the loonie. There was no major news out of Canada yesterday and it spent most of the day consolidating around the

USD/CAD Fundamental Forecast – September 30, 2016

It was a day of consolidation for the loonie. There was no major news out of Canada yesterday and it spent most of the day consolidating around the support at 1.3060 and the resistance at 1.3120. We had mentioned yesterday in our forecast that we should get a consolidation day and thats what we got. For those who are good in trading the extremes of the ranges, yesterday would have been the ideal day to be day trading.

Today we have the Canadian GDP that will be announced before the US session and it should provide an interesting insight into the Canadian economy. We are of the belief that the Canadian economy has been becoming progressively weaker over the past few months and the data does not yet fully reflect it yet. But lately, we have had the BOC Governor and others talk about this weakness and how the low oil prices are affecting the economy and maybe we are entering the phase when this will begin to show in the data which will ultimately lead to a cut in the interest rates.

USDCAD Hourly

We continue to be bullish on this pair as we believe that the weakness in the Canadian economy is still not over yet and this fundamental reason should cause a bullish run in this pair. As if on cue, fears about the Deutsche bank returned during the US session and this strengthened the USD and led a rally towards 1.3180 and it rests at 1.3153 as we write. Technically, we have strong support at 1.3060 and on the upper side, we have resistances at 1.3200 and 1.3255. A break of 1.3255 will confirm a bullish run. So, technically and fundamentally, it seems that we should be good for a bullish run. Take longs near support and have your stop losses beyond the ranges and you should do well. The Canadian GDP data is expected to come out today and it remains to be seen whether that will spur the expected bullishness in this pair. Trade safe and trade well. Today is also the end of the month and it is also possible for the pairs to be affected by month end flows and so be careful out there !

About the Author

Colin Firstauthor

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.