USD/CAD Daily Fundamental Forecast – February 24, 2017

USDCAD has managed to erase all the gains that it had made over the previous day on the back of some poor retail sales data. It is now back below the 1.3100 region as of this writing and it is here that the battle between the bears and the bulls to gain control over the pair, begins again.

USDCAD Weakens

The pair has been teasing the bulls and the bears for quite sometime now as it has not been able to make progress in either direction and seems to be stuck in a stalemate for now. Both the currencies involved in the pair seem to be alternating in terms of strength and weakness in tandem and that is one of the reasons why we have been seeing this pair in a tight trade mode with not much to give to either bulls or bears.

Over the last 24 hours, the USDCAD pair has moved down due to the weakness of the dollar all across the board. The dollar bulls have been disappointed as their expectations for a rate hike in March have been belied to some extent by the FOMC meeting minutes and the various experts also do not expect the US economy to expand as much as it was initially believed. This has caused the dollar to take a beating and pushed the pair down to the support.

Looking ahead to today, we have the CPI data from Canada and it will be looked forward to by the traders to give us some more indication of where the Canadian economy is headed. The retail sales data was a large disappointment and so this data will be viewed closely to see whether the weakening in the data would be a trend for the economy as a whole or just a small blip. If the data comes out strong, we could see the USDCAD pair threatening the range lows once again.