USD/CAD Daily Fundamental Forecast – February 22, 2017

USDCAD continues to trade in a buoyant manner despite the slight increase in the oil prices that were seen over the past 24 hours. The pair traded within a range but what should encourage the bulls is the fact that the pair traded at the highs of its range for most of the time and there was no signs of weakness. This was helped by the overall strength of the dollar across the board which ensured that the bulls in this pair were well supported.

USDCAD Bulls Have the Momentum

The pair has weakened a bit as of this morning but it was during the same session in Asia yesterday that the pair managed to make most of its gains. The rest of the day was just spent in meandering along the highs of the range with no specific direction. The bulls in this pair are looking forward to the FOMC meeting minutes later on in the day which they hope would give them a strong push by being hawkish. This expectation has been driven by the statements from the various Fed members over the last few weeks where they have kept the door open for a rate hike as early as March.

If the minutes do come out hawkish, then that would settle the short term trend for the USDCAD pair as we can then expect the pair to make a move towards 1.32 and further. The fact that the bulls have been able to hold on to the 1.30 region despite the heavy pressure shows the strength in the pair and also shows how key this region is, as far as the uptrend is concerned.

Looking ahead to today, we have the biggie in the FOMC meeting minutes and we also have some housing data out of the US. As far as Canada is concerned, we have the core retail sales data which will be key if the bears in USDCAD want to take back the control which they seem to have lost.