USD/CAD Daily Fundamental Forecast – July 26, 2017

USDCAD continued to stay in a strong manner though there were signs of recovery in the pair during the course of the day. We had mentioned in our forecast yesterday that the pair has been oversold for quite some time now and also that if there is to be a bounce in this pair, it has to happen in this price region as this has a strong buying support attached to it. It is in this view that we are seeing the pair now consolidating and ranging though the trend is clearly down.

USDCAD Finding Some Love

Yesterday, we saw a recovery of sorts in the dollar across the board on the back of strong consumer confidence data and also due to reports that said that the Republicans had voted to open the discussion on healthcare reforms again which means that the Bill is still alive. This helped the dollar to move higher and also helped the USDCAD pair to recover above 1.25 where it trades as of this writing.

But yesterday, we saw the oil prices continue to recover at the conclusion of a hawkish OPEC meeting where the OPEC has sent out a message that it is very serious and determined to push the oil prices higher in the medium term. This recovery in the oil prices has helped to support the CAD and this has helped to keep the USDCAD in the balance. The dollar bulls would be looking towards the FOMC meeting minutes later in the day to see if the Fed would lend some support to it.

So far, there has not been much support for the dollar from the Fed but todays FOMC minutes is likely to give some hints on their line of thinking and also on the timeline for the next rate hike which looks pretty distant at the moment. Any support for the dollar is likely to lead to a bounce in the USDCAD pair but that bounce is also likely to be short lived and heavily sold into.