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USD/CAD Daily Fundamental Forecast – September 21, 2017

By:
Colin First
Published: Sep 21, 2017, 06:47 UTC

The USDCAD pair continued its bounce, something which it has been doing since the beginning of the week. We had warned in our forecasts over the last few

USDCAD Thursday

The USDCAD pair continued its bounce, something which it has been doing since the beginning of the week. We had warned in our forecasts over the last few days that the pair is likely to continue its bounce as the dollar recovers across the board and that we are seeing signs of bullish consolidation which could lead the pair higher.

USDCAD Continues Bounce

This has been proved right over the last few days as the pair has bounced off slowly and steadily from the 1.2060 region and now trades well above the 1.23 region as of this writing and it continues to look strong for even more. The reason for the latest leg of the bullish run has been the hawkish FOMC announcement and the dot plot from the Fed. The dot plot shows that the Fed has started to lean towards a rate hike in December.

USDCAD Hourly
USDCAD Hourly

But unlike most other pairs, the strength of the dollar is a bit more subdued in this pair as Canada also braces itself for what could be another rate hike from the BOC later in the year. The BOC has tended to be more hawkish than the Fed in general and they have been helped in no small measure by the strength of the incoming data. The Fed still has to deal with some choppy incoming data and hope that it gets better in the coming months which would make its decision easier in December.

It is this balance that the USDCAD pair has been dealing with over the last few days and this is likely to keep the bounce under control despite the growing strength in the dollar. The strong and steady oil prices are also helping to keep the bid under the CAD. Looking ahead to the rest of the day, we do not have any major economic news from the US or Canada and we are likely to see some consolidation with a bullish bias for the rest of the day.

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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