USD/CAD Daily Fundamental Forecast – August 16, 2017

USDCAD is in an important price region, a region that could determine whether it will go up or down in the short and medium term as well and that is why we are seeing it taking a lot of time to consolidate and range before deciding which way it wants to go. Over the last few days, we have seen the pair getting pushed and pulled in either direction but the pair has been unfazed and continues to trade within a tight range which makes it sure that the next move is likely to be large and decisive as well.

USDCAD In Important Region

Over the last few days, we have seen the oil prices move lower due to supply concerns and also due to fall in demand from China and other parts of the world. This fall in oil prices has led to a weakening in the CAD currency and this has made the move upwards easier for this pair but we have also seen the oil prices beginning to stabilise this week which is lending a bit of support for CAD in the short term.

On the other hand, we have had some positive data from the US with the retail sales data yesterday coming in much stronger than expected. This, along with the strong NFP data earlier in the month, has helped to support the dollar and has led to talk of one more rate hike from the Fed later this year. These events have pushed the dollar and increased its strength all across the markets and this has helped the rally of the USDCAD pair to the 1.2750 region where it is resting as of now.

With further data from the US in the form of oil inventory data and the FOMC meeting minutes scheduled to be released later in the day, we are in for a volatile day of trading today which could finally see the USDCAD pair breaking out from the tight range that it is in now.