USD/CAD Daily Fundamental Forecast – January 3, 2018

The pair has been consolidating over the last 24 hours as the psychological region of 1.2500 provides some strong support for the short term. It remains to be seen whether the pair would continue to move lower in the following days or whether the dollar would be able to get a respite and could see some selling which should then help the pair to move higher during the short term.

USDCAD Near Support

The pair has been under the pump over the last couple of weeks as the dollar has weakened across the board. The strength of the oil prices has also added to the pressure and this has pushed the pair lower during this period. But all this has happened on low volume and thats why we have been asking the traders to hold their horses and wait for the traders to return back to their desks and see what they make of the situation.

Yesterday was the first trading day of the year and hence it was natural for the traders to feel a bit lazy after having had a chance to enjoy their holidays. We would like to give them some time to get settled and start establishing their positions before we can be sure of whether the trend would continue or whether we would be seeing a reversal. The data and the fundamentals over the next few days is likely to determine the short term direction.

Looking ahead to the rest of the day, we do not have any major news from Canada but we have the FOMC meeting minutes from December from the US. The market would be looking for signs of hawkishness from the Fed as far as a rate hike in March and 3 rate hikes for the rest of the year is concerned and if the Fed does sound hawkish, that might just be the impetus that the dollar bulls need to buy the dollar and push it higher all across the board.