USD/CAD Daily Fundamental Forecast – August 10, 2017

The USDCAD pair continues to trade near the highs of its range and any amount of selling does not seem to be enough to bring in a correction in this pair as yet. One of the reasons could be the fact that there has not been much economic news out of Canada and the US for this week and so that currencies might be trying to maintain status quo until the next push comes from somewhere but till then, we will have to wait.

USDCAD Likely to Find Going Tough

The pair did move slightly higher towards the second half of the day but that was met by some strong selling in the 1.2725 region and with several resistances lurking just beyond, the pair might find it difficult to make much progress unless and until it gets a push from somewhere. The jury is still out on whether this move up is a correction of the downtrend or whether it is a full scale reversal of the trend but so far, there has not yet been a clear cut signal. The latest leg in this upmove is something that was expected as part of the correction phase and that is why it is still unclear.

The oil prices have also been steadily bullish which has helped to lend some support to the CAD but with the dollar recovering all across the board, the market seems to be on a knife edge and it is becoming difficult to judge which way it wants to go. Also, we are likely to have discussions on the NAFTA agreement in a weeks time and that is likely to bring in a lot of volatility in this pair. So, the investors and traders might be on a wait and watch mode to see how the talks go before they choose to push the pair in a specific direction.

Looking ahead to the rest of the day, we do not have any major news from Canada but we have the PPI data from the US which should give us a hint on whether the US economy continues to recover. We believe that the USDCAD pair would continue to consolidate but with a lot of selling above, it might find the going tough.