USD/CAD Daily Fundamental Forecast – September 4, 2017

The USDCAD pair continues to trade in a weak manner during Friday and as of today as well. The fundamentals are clearly in favor of the downtrend and with the pair breaking through the lows of the range, the technicals also seem to be in favor of the downtrend which should present a bleak picture for those who are looking to buy in this pair. But of course, this is the FX market and anything is possible in this market and the bulls would be hoping for a recovery in the dollar in the short term so that they would be able to make a stand.

USDCAD Pair Gets Hit Due to Weak Dollar

On Friday, the focus was on the dollar as the NFP data and the wages data were scheduled to be released later in the day. There was a feeling that, despite the strong ADP report, the data would come out weak due to the way that the data is calculated and also due to the fact that the employment data in August has been known to be weak traditionally. This turned out to be correct as the NFP and the wages data came in much weaker than expected and the dollar bears did not need any second invitation.

They began another round of dollar selling which saw the pair crash through the lows of the range and it crashed through 1.24 and went through below 1.2350 for a brief while before it recovered. We have seen a mini bounce in the pair so far which has helped to carry it above the 1.2400 mark but this has to be viewed as just a correction of the fall unless and until the 1.2450 region is broken back through in a clean and clear manner.

Looking ahead to the rest of the day, it is a holiday in the US and hence there are no specific economic news or events scheduled to be released from there for today. So, we can expect the volatility and the liquidity to be low for the day which should see some consolidation in the USDCAD pair.