USD/CAD Daily Fundamental Forecast – December 21, 2017

The USDCAD pair continues to move slowly lower as the dollar is unable to gain too much of a momentum despite the passage of the tax reform bill in the US. The bill has been passed for all practical purposes but we have not been able to see any kind of a bullish trend in the dollar post the passage of the bill with all its bullish energy being spent before the bill actually got through the Senate.

USDCAD Continues Near Range Highs

So, we are seeing some consolidation and ranging in the pair and as we have been pointing out in many of our forecasts over the last couple of weeks, we believe that the pair would lack the momentum that it needs to break through the range on either side. That is the reason that we are seeing the pair trying its best to break through the highs of the range but failing to do so ultimately.

This is only going to get worse over the next couple of weeks as the market winds down to the end of the year and we see many traders going on on their holidays. That will lead to a dry up in the liquidity of the market and this will in turn lead to days of very low volatility. By all this, it basically means that there would not be much action in this pair in the coming weeks.

The last chance for the traders to see some action is likely to come in today as we have the inflation and retail sales data from Canada and we also have the final GDP data from the US. These economic data are likely to bring in some volatility in the markets but we doubt whether that would be enough to push the prices through the highs or the lows of the range. We do not expect any major surprises in the data and hence we should see the consolidation and ranging continue.