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The USDCAD pair continues to trade with no specific direction which shows that some consolidation and ranging is happening in the pair. Just last week, it looked as though the bulls were in total control of the pair as the prices shot through the 1.30 region and marched towards the 1.32 region but that has since promptly dropped back.
USDCAD Nears Lows
The drop in prices is due to the weakness in the dollar, that has set in during the course of this week, and also due to the strength in the oil prices which we have seen during this period. The strength in the oil prices has helped to support the CAD as the Canadian economy depends a lot on the oil prices. But we have also had some economic data out of Canada which has been generally supportive of the CAD and a combination of all these factors have helped the USDCAD pair to move lower.
The dollar has also weakened during the course of this week which has only added to the pressure that the bulls have been under. The pair has hence slipped below the 1.30 region once again and is now back in the range between the 1.28 and the 1.30 region and this is likely to last for the short term. Today marks the end of the week, the month as well as the quarter and it is also a holiday today for most regions of the world including Canada.
Considering this, we believe that we are likely to see a lot of consolidation and ranging for the day as most of the traders would not be available for the day and hence the liquidity and the volatility is likely to be low. The action should pick up thick and fast from next week which is when we will know the real direction for the short term.
This article was originally posted on FX Empire