USD/CAD Daily Fundamental Forecast – April 21, 2017

USDCAD continues to trade near its range highs as the pair is still undecided on which direction it wants to take as it sits in the higher echelons. Over the last 24 hours, the pair made a brief peek towards 1.3500 but it was promptly beaten back. We had mentioned in our forecast yesterday that the pair is likely to see a lot of selling in the 1.35 region and this has been the case everytime it has made a visit to this region over the last few months. Each and everytime, the bears have been succesfully able to ward off all the advances from the bulls into the region and hence this region remains the line in the sand which the traders have to break through in order to make any further progress.

USDCAD Building Up Strength

Till that happens,we can expect some more consolidation and ranging in this pair. What should encourage the bulls this time around is the fact that the correction this time was much less than what was expected and the region around 1.3280 was able to hold the correction this time though most of the traders had expected the correction to push the pair towards 1.30.

The fact that the correction was shallow is an indication of the strength in this pair and with the oil prices also trading pretty weakly over the last few days, we would expect the pair to make a strong attempt at breaking the highs at around the 1.35 region if and when the oil prices fall below $50.

Looking ahead to the rest of the day, we have the CPI data from Canada scheduled to be released later in the day which is likely to bring in a bit of volatility. It would be good for the traders to have an eye on the oil prices and any signs of weakness there would translate into this pair moving up.