USDCAD Under Pressure Due to Higher Oil Prices

The USDCAD pair continues to trade near the lows of its range as the FOMC meeting minutes and the inflation data from the US has failed to lift the dollar by too much. The pair continues to trade near the 1.26 region as of this writing though it did make a brief foray below the 1.2550 region during this period.

USDCAD Lower

It is expected that the focus of the market would shift towards the trade war between the US and China and also the escalating situation in Syria in which more and more countries are going to get involved in. This is going to increase the risks and the uncertainties in the market and we do not know how that is going to exactly impact the dollar or the CAD. The CAD could get strengthened due to the rising oil prices but that would be compensated by the fact that the dollar may see some buying due to its stature as the safe haven currency.

This would mean that both of these are likely to cancel out each other and hence we can expect some consolidation. Also, with the prices near the strong support region around 1.25, we believe that this would be an additional reason for the pair to just spend the short term in consolidation as the market digests the losses in this pair during this period. We would not be surprised if there is another visit towards the 1.25 region but that should hold the prices for now.

Looking ahead to the rest of the day, we do not have any major economic news or data from the US or Canada but the focus would be on the war in Syria and how far that is going to escalate in the coming days. This should keep the market volatile during this period.