USD/CAD Daily Fundamental Forecast – July 14, 2017
It was a slow day all around the markets yesterday as the pairs were caught in a tight range and they went through a period of consolidation and USDCAD was no exception to that as it was stuck in a rut just above the 1.27 region. After the fall on the day before, we are likely to see a bounce in these price regions but this would only be a correction and not a change in trend.
USDCAD Might Bounce
Also, any kind of bounce is a good sign that the downtrend is still in place as it would provide an opportunity for the longs to get out and for the shorts to pile in on further shorts at better prices. That is the essence of any kind of a bounce and it is the same that we are likely to see in this pair. After the hawkish hike from the BOC on the day before and with the dollar dithering, there is even more reason for the investors and the traders to buy the CAD and thats what we have been seeing.
As mentioned in the forecast yesterday, the CAD has been the strongest currency over the past month or so and it is likely to remain so in the short term as the market digests the rate hike from the day before. The BOC has delivered the rate hike and the expectations very well and it is generally believed that they would handle the further rate hikes equally well. The dollar has not been able to string together a bullish run and with Yellen also failing to provide much support to the dollar in her testimony, it has been left to the incoming data to help shore up the dollar.
That opportunity might come about later in the day today, as we have the CPI and retail sales data from the US. These 2 sets of data are probably the most important pieces of data after the NFP and hence will be watched very closely. If the data comes out strong, then we are likely to get the bounce in the USDCAD pair that we had mentioned before.
This article was originally posted on FX Empire