USD/CAD Daily Fundamental Forecast – August 9, 2017

The USDCAD pair continued to trade within a tight range as it consolidates and waits for the next push from some fundamental or economic event which will determine its next direction. After a few days of strong moves, the pair has slowed down a bit in the recent days and it is now open to question on whether this current strength in this pair is a correction of the strong downtrend or whether it is a full scale recovery in the pair which is likely to take the prices much higher.

USDCAD Still in Consolidation

One part of the market believes that the CAD has run its course and this upmove is just a sign of things to come as the oil prices and the CAD begin to weaken in the near future. The other part of the market believes that this move is a correction of the downtrend and hence the downtrend should resume anytime soon which will then carry this pair back towards the lows and maybe even further as well. Both these are open to question and we believe that there might be some hints for the answer in this week.

There has not been much data from the US or Canada for much of this week and even the strong JOLTS data from the US yesterday could not help the USDCAD push through its range highs and so, considering this, we have to say that the bears are still in control of this pair. Of course, all this could quickly change if the CPI data from the US, scheduled to be released later in the week, comes out stronger and then this could turn into a full fledged recovery in the dollar strength which would then carry the pair much higher.

As for today, we do not have any major economic news from Canada but we have the oil inventory data from the US which is likely to bring in a lot of volatility in the oil prices and hence could affect the CAD as well. We believe that we are likely to see some consolidation in the USDCAD pair with a bearish bias.