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USD/CAD Fundamental Analysis – week of May 22, 2017

By:
Colin First
Published: May 20, 2017, 07:27 UTC

Considering the volatility in the rest of the markets around, it has to be said that the USDCAD generally had a quiet week especially considering the fact

USD/CAD Fundamental Analysis – week of May 22, 2017

Considering the volatility in the rest of the markets around, it has to be said that the USDCAD generally had a quiet week especially considering the fact that the US dollar was the main reason for the volatility in the other markets. The pair did move around 200 pips, all in one direction, but half of that move came on Friday when the rest of the markets had already exhausted themselves for the week.

USDCAD Dips As Oil Rises

The pair spent most of the week in a tight range in a period of consolidation as the weakness in the dollar and the CAD seemed to complement each other and the bulls and the bears seem to have been in a happy arrangement pushing the prices back and forth among themselves. The price seemed to be moving on either side of 1.36 with no specific direction as the oil prices continued to remain steady and the dollar was clearly on the backfoot all across the markets due to the political troubles of Trump and his team.

USDCAD Daily
USDCAD Daily

It was only towards the close of the week, that we saw the market take recognition of the rise in oil prices, which would in turn helped the Canadian economy. As the oil prices moved above the important mark of $50 and managed to stay above, we saw the CAD gain in strength and this helped to push the USDCAD pair towards 1.3500. There was no end to the troubles for the dollar as hopes of a Fed rate hike in June also began to slowly recede and this double blow helped the market to forget the troubles in the housing sector for Canada.

Looking ahead to the coming week, we have the Prelim GDP and the FOMC minutes from the US and we have the rate announcement and the statement from Canada as well. All these, along with the continuing political saga in the US, should keep the pair volatile. The pair is in a very crucial support region of 1.35 and a clean break of this region could open up 1.30 in the short/medium term.

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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