USD/CAD Daily Fundamental Forecast – January 17, 2017

The USDCAD spent most of the day yesterday consolidating and ranging, as we had mentioned in our forecast yesterday. It was one of the rare days of the year when it is a holiday in USA but not a holiday in Canada and hence we saw the pair trading with a strong upward bias for a large part of the day. There was general increase in global risk but that did not seem to affect the oil prices and neither did it seem to affect the USDCAD pair much as well.

As we have been repeatedly saying over the past couple of months, we continue to believe that the pair is in an uptrend and we will continue to advocate traders to buy any kind of correction in this pair. We will change this view of ours if and when there is a clean break of 1.3000 at any point of time. The key would be the return of the strength in the dollar which has been absent over the past couple of weeks. What would also be considered as crucial is the economic data from Canada. A large part of the market expected some bad data from Canada due to the low prices of oil but we have seen that nothing of that sort has happened and we have been seeing some really strong data from Canada over the last month or so. This has kept the CAD supported for long and this is the reason why the pair has not been able to make much progress.

Looking ahead to today, we do not have any major news from the Canadian region while we have the US Treasury secretary making a speech late in the day during the NY session which could cause some volatility in the pair. Expect some more consolidation with a bullish bias in this pair in the short term.