USD/CAD Daily Fundamental Forecast – September 27, 2017

The USDCAD pair continued to trade in a strong manner but it seems to have hit a stumbling block in the 1.24 region and we are seeing some consolidation and ranging in this region over the past 24 hours. We also have a speech from the BOC Chief later on today which could bring in some volatility in this pair and help it to break through the consolidation that is happening right now.

USDCAD Pair at the Cross Roads

The USDCAD pair is being driven by the dollar strength over the past couple of days. During this period, we have seen the dollar recover on the back of some good data and also due to the fact that the Fed has kept the door open for a further rate hike later in the year. This has helped the USDCAD pair to strengthen across the board over the last few days and it has pushed the pair towards the 1.24 region. But it is in this region through till 1.25 that the pair is expected to face a lot of selling.

This region had been a strong support on the way down and hence it is only natural for us to expect it to act as a resistance on the way up. If the pair does manage to move through 1.25, then we should be in for a large bounce from there but till then, we have to assume that the downtrend in this pair is still intact. The support for the CAD from the BOC and the rising oil prices is making it difficult for the dollar to make much of an impact on this pair.

Looking ahead to the rest of the day, we have the durable goods data from the US but the more important event would be the speech from the BOC Governor Poloz when he is expected to touch upon monetary policy. This is likely to keep the traders on their toes as they would watch out for the return of the downtrend.