USD/CAD Daily Fundamental Forecast – April 28, 2017

The USDCAD pair finally seems to be free from the burden that was the 1.35 region for the pair and with the burden no longer there, it has been floating upwards over the last few days. The 1.35 region had been a very strong resistance for the pair over the last few months and we have seen that ot had failed in that region many a time ever since the beginning of the year. But unlike the moves before, this move had been slow and steadily building up rather than a quick breakthrough move and it has been helped on by some fundamental reasons which has helped to make this move stick.

USDCAD Removed of Shackles

One of the fundamental reason has been the threat from Trump that he would like to renegotiate the NAFTA agreement. He had raised this threat a few months back as well but after that, he had let the talk die down but he seems to have picked it up back again and this has led to fears in Canada that the trade would be affected and this would in turn affect the Canadian economy.

We have also been seeing that the oil prices continue to trade weakly and a combination of this factors has helped the USDCAD pair to push through steadily through 1.35 and now on to 1.36 and now our medium term target of 1.40 is in focus. The bulls are likely to keep the pressure going and this should keep the pair buoyed.

Looking ahead to the rest of the day, we have the advance GDP data from the US and we also have the GDP data from Canada and both of these are likely to bring in some good volatility in the USDCAD pair. Till that time, we are likely to see some choppy trading, especially with the month end currency flows also in the picture.