USD/CAD Daily Fundamental Forecast – April 19, 2017

USDCAD continued to see a tussle between the bulls and the bears and this has been going on for a couple of weeks now and there has been no clear winner in this battle so far. While on some days, the bears hold the upper hand which results in the pair moving towards the support at the 1.3270 region, on other days, like yesterday, we see the bulls in control which pushes the pair towards the 1.34 mark and we have been seeing a consolidation and ranging between these 2 price regions over the past couple of weeks. This has been a dream come true for range traders while it is the investors who invest for the long term, who suffer.

USDCAD Unlikely To Move Beyond Range

For yesterday, we saw some housing data come out from Canada and it showed that the new home sales were slowing down a lot. This placed doubts on the housing sector which is an indication of the slowing Canadian economy. This was one of the reasons why we have been seeing the CAD getting weaker over the last 24 hours. Also, we also saw the oil prices weaken yesterday as the data that came in through the API showed a bigger inventory build which pushed the oil prices lower and this also tends to put pressure on the CAD as the Canadian economy is strongly dependent on oil prices.

But we believe that all such moves are likely to be short lived as we believe that the consolidation and the ranging is here to stay for the short term. We do not expect the pair to have enough ammunition to be able to move much beyond the range that it is in right now.

Looking ahead to the rest of the day, we have the oil inventory data from the US but with the bigger traders getting the data yesterday itself, we expect it to have minimal impact on the USDCAD.