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The USDCAD pair rose higher during the course of trading on Friday as the dollar began to steady itself and the oil prices weakened but all that this could manage was to push the prices back towards the highs of the range in the 1.25 region. We are in the second half of the month and it is generally expected that the market would go into a slumber mode as the economic data from different parts of the world begin to dry up.

USDCAD Moves to Highs of Range

This is what we are seeing happening in the pair as the prices have been choppy over the last week or so and hence we are only seeing consolidation and ranging during this period with no threat of any kind of breakout in any specific direction. It is indeed a surprise that such consolidation is taking place despite the fact that the BOC has been hawkish enough to raise the rates over the last week but this seems to have failed to have much of an impact.

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This is just an indication of how the market is trying to overrun the news and the actions of the central banks. In any case, with the news that the OPEC and Russia have planned to continue the production cuts in the oil markets, we should see the oil prices strengthen which should help the CAD in the short term. But at the same time, the focus is likely to shift to the dollar in the coming days with the rate hikes looming ahead and hence it should be a good battle between the bulls and the bears.

Looking ahead to the rest of the day, we do not have any major economic data from the US or Canada and hence we can safely expect the pair to continue to consolidate for the day. The only point of interest today would be whether the Senate would approve the bill to remove the shutdown that the US is currently witnessing and if this is approved, we should see the dollar getting some support.

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