The USDCAD pair continues to trade in a weak manner as it sits near the lows of its range and consolidates. It looks as though the move down, following the strong data from Canada has completed, and we might see the pair beginning to move back up towards the high of its range in due course of time.
USDCAD Continues Consolidation
The pair has been trading within a tight range over the last couple of days as the lack of fundamentals and new events is clearly showing up in the market as many of the pairs continue to trade within a tight range or have been simply chopping around for much of the last few days. The CAD has been well supported by the rise in oil prices and this is likely to continue to be so as the oil prices look to move towards the $60 region. The oil prices do not seem to be affected too much by the strength or weakness of the dollar though and hence that is unlikely to have much of an impact.
With the rate hike in Canada ruled out atleast for the next few months, the market is looking at the incoming data from Canada to see whether it improves as it is then likely to improve the chances of a surprise rate hike from the BOC sometime soon. On the other hand, the market continues to wait with bated breath for news on the rate hike from the Fed in December which is as yet unconfirmed and hence any news on that front is likely bring in volatility in this pair.
Looking ahead to the rest of the day, we do not have any major news from the US or Canada for the day and so we can expect the consolidation and ranging to continue for the day. This is likely to continue for the short term as we head towards the fag end of the week.