USD/CAD Daily Fundamental Forecast – March 22, 2017

Yesterday, the main point of action that was expected in the USDCAD pair was the data on core retail sales from Canada. Though it came much stronger than what was expected, we also saw that the data for the previous month was revised downwards. This revision helped to ease some of the pressure that the pair was under and helped it to move above 1.3350 where it trades as of this writing. During the early part of the day yesterday, we saw the pair dipping towards 1.3260 where it was met with a lot of buying.

USDCAD Continues to Range

This buying helped in the slow and steady recovery of the pair back towards 1.3300 and the revision in the retail sales data helped to push the pair even higher. The Canadian dollar has also been affected by the repeated failure in the recovery of oil prices as we saw the prices recover for a brief while only to flop later on during the day and this also helped to weaken the CAD which helped to push the USDCAD pair above 1.3350.

As it can be clearly seen, the pair is now moved to the next lower rung of the range and it is likely to consolidate in this range for sometime before it moves even lower. The pair now seems to be in a well defined range between 1.30 and 1.35 and we believe that this kind of range would now be well set atleast in the short term and this would be very useful for range traders who can simply wait for the prices to reach the edges of the range and then buy and sell based on that.

Looking ahead to the rest of the day, we do not have any major news from the US for the day except for the oil inventory data. This is likely to impact the CAD and considering the price action late in the day yesterday (when some of the larger traders would have received the data beforehand), we expect the CAD to get weakened as a result and so we expect some more consolidation between the 1.33 and 1.34 regions for the rest of the day.