USD/CAD Daily Fundamental Forecast – January 5, 2018

It is likely to be an interesting day today as most of the day yesterday turned out to be a period of consolidation and ranging around the 1.25 region. This region is likely to be crucial in the battle between the bulls and the bears as a clean and quick break of this region is likely to push the pair into the grip of the bears and vice versa is likely to happen.

USDCAD Looks Ahead to Crucial Day

There is a host of data from both Canada and the US later in the day and this is expected to be crucial in determining the short term direction for this pair. It has been on a downtrend over the last couple of weeks and this has been mainly due to the weakness in the dollar that has been seen across the markets. We are also seeing the oil prices continuing to move higher and that has helped to add some steadiness and strength to the CAD over the medium term. It remains to be seen whether this alone would be enough to hold the CAD steady.

The dollar has been on the backfoot of late and this week, it has been pretty much choppy. This is to be expected as the traders are returning back from their holidays during the course of the week and have been pushing the various pairs this way and that depending on which way they think the market should be moving. There has been no clarity in the moves as yet and that is why it is safer for the traders to stick to the sidelines for now.

Looking ahead to the rest of the day, we have the NFP and wages data report from the US while we have the employment data from Canada as well. Both these pieces of data are very crucial for the respective economies and hence expected to have a large say in determining the strengths of the CAD and USD as well. We could be in for a lot of volatility in this pair today but this would be useful to determine what is going to happen to the pair in the coming week.