USD/CAD Daily Fundamental Forecast – August 25, 2017

The USDCAD pair continues to move lower and a look at its movements over the last 2 weeks will give an idea about how relentless the downtrend has been and how how strong it is likely to be unless there is some fundamental change in the dollar in the horizon and this is what we have been saying all these weeks as well.

USDCAD Continues in Strong Downtrend

The pair moved closer to the 1.25 region yesterday as the strong and steady oil prices continued to place the pair under pressure. This pressure is likely to continue during the course of the day as we head into the most anticipated economic event of the week which is the meeting at Jackson Hole. The meeting would be highlighted by the speeches from Yellen and Draghi who are likely to touch upon the monetary policy during the course of their respective speeches. While Yellen is not expected to support the dollar too much, it is the speech from Draghi that is grabbing the attention of the markets.

If Yellen fails to support the dollar, then we are likely to see the strong downtrend in the pair continue for the short term with the support region around 1.24 being the next obvious target. This is the region from where the pair had managed to bring in a decent bounce of around 400 pips but considering the strength of the downtrend, it remains to be seen how long the bulls would be able to hold on to this region.

Looking ahead to the rest, as mentioned above, all the important events are scheduled for late in the day and so we do not expect too much of volatility during the rest of the day leading up to the speeches and we are likely to see the pair consolidate and range within a small price region during the course of the London session.