USD/CAD Forecast Dec. 19, 2011, Fundamental Analysis

, as the investors are targeting lower-yielding assets, where uncertainty continues to surround the outlook ofEurope’s debt crisis, while economic fundamentals proved the world’s largest economy is on the right track of recovery as 2011 nears to end.

This week the focus will shift to the end of the year trading as this week is the last before the holiday infamous for low volume and tight ranged trading. The sentiment will start to shape as investors stay aside ahead of the start of the coming year and closely eye developments from the euro area.

On Monday, eyes will be focused on the French auction, with hopes bond yields decline this time, as rating agencies still has its top credit rating under the line of fire.

The USD/CAD pair could still rise if pessimism continues to dominate markets, but we still expect volatility to hold the steer for now, as uncertainty remains the main theme in markets, and that could also lead to deep fluctuations for the USD/CAD pair.

Monday December 19:

We don’t have news from the United States and Canada, and accordingly, traders will be focused on the developments from Europe.