USD/CAD Daily Fundamental Forecast – June 29, 2017
USDCAD managed to reach our short term target region of 1.3000 and it did not take long to do it. We had expected that to happen over the next couple of weeks but a combination of events and fundamentals including the recovering oil prices, strong statements from the BOC and a weak dollar has ensured that we have reached the target region much quicker than what we had anticipated.
USDCAD Falls Through on Hawkish BOC
Now that we are here, it is probably time to see some bounce in the prices as a lot of bears would have been viewing this round figure of 1.30 as a target and once the target has been achieved, they are likely to take off profits over here. On the other hand, bulls would be expecting a bounce from here and hence the buys are also expected to build over here and this is likely to lead to a bounce though it will only be a correction to the downtrend rather than any change in the trend.
The CAD has been well supported by the BOC whose senior members have talked about a reversal in the rate policy and this is a clear signal that the rates are likely to be on hold in the short term with the possibility that the rates would be increased in the medium and long term. The CAD has also been supported by the oil prices that have been rising steadily since the start of the week. On the other hand, the dollar has been on the backfoot over the last few days as the political turmoil in the US continues to affect the dollar and the incoming economic data from the US hasnt helped as well. All these have seen the USDCAD prices crash since the beginning of the week.
Looking ahead to the rest of the day, we do not have any major news from Canada but we have the GDP data from the US which will be watched closely to see if there is a recovery in the economic data as the Fed had promised. If yes, then we should get the bounce in the USDCAD prices that we had mentioned earlier.
This article was originally posted on FX Empire