USD/CAD Daily Fundamental Forecast – July 5, 2017

The USDCAD pair fell further into the abyss and it is a measure of the strength of the CAD that even though the dollar is recovering across the board, it has not been able to make much headway in this pair and continues its fall which began a few weeks ago. It is indeed a surprise to many traders to see the pair, which had looked bullish only a few weeks ago, suffer such a large fall within this period and now look very bearish.

USDCAD In Bearish Grip

We had mentioned that the pair has changed into a bearish trend ever since the pair fell below the key 1.35 region and we have now seen the pair fall by more than 600 pips since that time. Yesterday, it was the turn of the Canadian PMI to inflict pain on this pair as it came in at a strong 54.7 value though it was only on expected lines. The CAD has also been ably supported by the rising oil prices which continues on its upward journey with no signs of abating in the near future.

With the pair having broken through the key 1.2980-1.3000 now, this region should serve as the resistance for the short and medium term and we do not see the pair moving above this region anytime soon as the bears are clearly in control. Yesterday, we saw a quick drop below 1.29 on the back of the PMI data and though the pair has since recovered, it is clear who is in control and this is likely to last in the short term.

Looking ahead to the rest of the day, we do not have any major news from Canada but the traders from the US return back to their desks after the holiday which should bring in some good volatility. We also have the FOMC minutes late in the evening which will be watched very closely for clues to the next rate hike.