USD/CAD Daily Fundamental Forecast – August 17, 2017

The USDCAD finally crashed lower yesterday on the back of a weak dollar after having sustained at the highs of the range for quite some time over the last couple of weeks or so. The longer it managed to sustain there, more was the feeling that probably the move up was a full reversal. We had also mentioned that the region around 1.2660 was likely to be key and a break of this region was very important for the downtrend to resume and yesterday we finally managed to break through that region.

USDCAD Breaks Lower

This breakdown now confirms the fact that we are back in the downtrend and that the pair is in the grip of the bears once again. The fact that the CAD gained strength and the pair moved lower even when the oil prices were not strong just shows the amount of weakness in the dollar and also the strength of the downtrend. We should now be looking for a test of the range lows in the 1.24 region once again as the move begins to gain pace.

We have always been mentioning over the last few days that the pair is ion a downtrend and unless and until there is a clean break of the 1.2750 region, the downtrend would be still intact and this has been proved once again. The pair is likely to slowly and steadily drip lower as the dollar strength begins to wane in due course of time. The difference in the tone of the BOC and the Fed is enough sign that the fundamentals are skewed very much in favor of the Canadian economy and this should be enough to keep pushing the pair lower.

Looking ahead to the rest of the day, we do not have any major news from Canada while we have the unemployment data from the US. We may see a small dead cat bounce in the pair before it resumes its downtrend again.