USD/CAD Weekly Fundamental Analysis, August 24 – August 28, 2015 Forecast

Weekly Analysis and Recommendations:

The USD/CAD closed higher last week. The trend is likely to continue this week if crude oil prices continue to decline. 

There are no major Canadian economic releases this week so the focus will be on the U.S. reports which include durable goods, home sales, consumer confidence and preliminary GDP. FOMC member Lockhart could create some volatility on Monday if he addresses the interest rate hike situation. FOMC Member Fischer also delivers a speech on Saturday. 

Last week, Statistics Canada released retail sales figures for June and the consumer price index (CPI) for July. Canadian retail sales rose by 0.6 percent in June, double of what analysts were expecting. CPI also increased by 0.1 percent, but the consensus was looking for a 0.2 percent reading. 

The problem with the Canadian economy does not appear to be with the economic numbers, but with falling oil prices. With U.S. and OPEC production still contributing to the global support glut, prices are expected to continue to weaken over the near-term. 

Crude Oil is currently flirting with the psychological $40.00 level. Taking out this level with conviction could trigger a steep drop, putting $25.00 in sight. Combining low crude oil prices with a rate hike by the Fed in September could trigger a move by the USD/CAD to 1.3500 over the near-term. 

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports and we provide daily updates and outlooks. 

Reports to Watch This Week:

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