USD/CAD Daily Fundamental Forecast – July 4, 2017

USDCAD recovered slightly during the course of the day yesterday on the back of the recovery in the dollar. The dollar has recovered on the back of anticipation building about the various news events that are scheduled to be released during the later part of the week. The CAD also has its own set of data to deal with towards the end of the week and so this correction in the USDCAD prices should be taken with a pinch of salt.

USDCAD Stages Slight Recovery

Also, another point to note here is the fact that though we say this as a correction, the entire move has been worth only around 40 pips and the prices continue to stay below the 1.3000 mark as of this writing. It is a measure of the strength of the trend that despite a recovery in the dollar value, the bulls in this pair have not been able to make a stand as yet which clearly shows that the bears are on control in this pair and are likely to continue to remain so in the near future as well.

Yesterday, we saw the oil prices rise steadily through the course of the day which helped to keep the CAD well bid. The Canadian economy depends a lot on the oil prices and any recovery in the oil prices is bound to support the CAD. We expect the recovery in the oil prices to continue in the short term and this is likely to further help in keeping the USDCAD under pressure. At the same time, the market is looking forward to the employment report from the US towards the end of the week to see if the trend of weak data from there is reversed as the Fed would like us to believe. If this happens, then we could see the timeline for the next Fed rate hike getting nearer which should help the dollar.

Looking ahead to the rest of the day, it is a holiday in the US today and so we should expect some consolidation and ranging in this pair on either side of 1.3000 as the market gets itself ready for the second half of the week.