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USD/CAD Daily Fundamental Forecast – June 23, 2017

By:
Colin First
Published: Jun 23, 2017, 04:56 UTC

USDCAD is back in its downtrend as the prices fell yesterday on data from Canada and the continuing low oil prices as well. We had mentioned the same in

USD/CAD Daily Fundamental Forecast – June 23, 2017

USDCAD is back in its downtrend as the prices fell yesterday on data from Canada and the continuing low oil prices as well. We had mentioned the same in our forecast yesterday where we had said that the region between 1.3300 and 1.3330 would be key and while a clear break of that would open up 1.35, we had said that a failure would lead to continuation of the downtrend.

USDCAD Back in Downtrend

It is now clear that the pair would be unable to mount any kind of a serious comeback in the short term. The incoming data from Canada continues to show a strong and recovering economy and this would help the decision making in the BOC easier. Yesterday, we got a strong retail sales report from Canada and this has increased the hopes for a rate hike from the BOC before the end of the year. The BOC had hinted something similar a couple of weeks back and this had triggered the current downtrend that we are in.

USDCAD Hourly
USDCAD Hourly

It also helps that the oil prices have held steady over the last 24 hours though they continue to look weak. The oil prices could be the only thing that is stopping the downtrend from reaching full momentum. With the oil prices set to drop lower, it could pressure the CAD even more. But for now, the improving economic data and the thoughts of a rate hike have been helping the CAD to strengthen and this is likely to continue in the short term. As of now, the USDCAD pair is back to the lows of its range and with the downtrend continuing, we should see the prices being pulled towards the 1.31 and then the 1.30 mark in the short term.

Looking ahead to the rest of the day, we have another important piece of data from Canada as we are going to see the CPI data being released later in the day. If the current trend of strong data continues, then this should bring in the next push for the CAD which would then push the prices of USDCAD even lower towards 1.31 and beyond.

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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