USD/CAD Daily Fundamental Forecast – February 23, 2017

The bulls seem well on their way to gaining control over the USDCAD pair as the pair continues to trade near the highs of its range and the bulls have managed to retain control despite the strength of the US dollar fading and come back in an alternative manner. This show of strength by the bulls in this bounce and also in the way that they defended the 1.3000 support region should be a good indication of what is to come in the short term and the medium term in this pair if the uptrend continues.

USDCAD Bulls take Control

Yesterday, we saw the core retail sales data from Canada being released, and it was a large disappointment. It was the worst sales data in the last 9 months and the effect of the weak oil prices seem to be slowly showing up in the economy. This was enough reason for the bulls to push the pair beyond 1.3200 for a brief while where they were met with a lot of selling.

Yesterday, we also saw the release of the FOMC meeting minutes and the markets were expecting the minutes to be high hawkish in line with what the Fed members have been saying publicly over the last few weeks. But the minutes were generally a large disappointment as the Fed team chose to adopt a middle of choosing to hike rates very soon rather than saying in specific about any hike in March. This disappointed the USD bulls which has led to the pair falling just below 1.3150 as of this writing.

Looking ahead to today, we have the unemployment claims data from the US as well as the oil inventory data but we do not have any economic news of importance from the Canadian region. We expect this consolidation between 1.31 and 1.32 in USDCAD to continue for today as well with a slight bearish to neutral bias.