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USD/CAD Daily Fundamental Forecast – April 20, 2017

By:
Colin First
Published: Apr 20, 2017, 04:39 UTC

USDCAD continues to move higher and higher towards the 1.35 region where it is likely to run into a lot of selling, as we have seen over the past few

USD/CAD Daily Fundamental Forecast – April 20, 2017

USDCAD continues to move higher and higher towards the 1.35 region where it is likely to run into a lot of selling, as we have seen over the past few months. After spending days and weeks within a small 150-200 pip range, the bulls have finally managed to move the pair decisively through 1.3400 and it now trades just below 1.3480 as of this writing and it looks ominous. Of course, the bears would be licking their lips at the prospect of being able to sell in the 1.35 region as they would be able to lean on the historic resistance in that region which has fought back several advances from the buyers since late last year.

USDCAD Aiming for 1.35

The latest round of weakness has been brought about by concern over the housing sector in Canada which threw up a very weak number a couple of days back, in the form of new home sales. This concern was made worser by the fall in the oil prices which fell by close to 4% over the last 24 hours. The Canadian economy is tied closely to the oil prices and any fall in the oil prices leads to a weakening in the CAD.

USDCAD Hourly
USDCAD Hourly

This is what we saw yesterday and this helped the USDCAD pair to blow through 1.3450 pretty easily and move towards 1.35. The oil prices had fallen on the back of concern on whether the oil production cut agreement would continue to run beyond the first half of the year and this price fall brought in a lot of pressure on the CAD. This pressure is likely to continue in the short term as all eyes would be closely watching the oil prices to see if it breaks and falls through the crucial $50 region.

Looking ahead to the rest of the day, we do not have any major news from Canada while we have the manufacturing index and the unemployments claims data from the US. With the dollar continuing to hold steady, the USDCAD will continue to trade in a buoyant manner but the 1.35 region should cap for now.

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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