USD/CAD Daily Fundamental Forecast – August 15, 2017
The USDCAD pair simply refuses to go down as the pressure on the oil prices has been weighing on the CAD as well which has given a chance for the pair to continue to stay strong and not buckle down under the pressure of the downtrend which we have been seeing in this pair over the last weeks or so. Try as they might, the bears in this pair have so far been unsuccessful in pushing down the prices and this is set to continue for the short term.
USDCAD Continues to Stay Strong
At the same time when the oil prices have been moving lower, we have also been seeing the dollar gaining in strength across the board and this is also one of the reasons why the pair has been strong. We had mentioned in our forecast yesterday that the price region around the 1.2660 is likely to be the tipping point as far as the bears and the bulls are concerned and unless and until the prices break through this region cleanly, we are unlikely to see the pair moving lower.
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On the other hand, we continue to believe in the downtrend as far as the prices are concerned and we believe that the current move up is only a correction of the larger downtrend as the BOC has still a lot of ammunition left, in the form of rate hikes while the Fed is almost at its exhaustion point with its data not supporting rate hikes for now.
It is under this situation that we have the retail sales data from the US coming out later in the day. This is probably the third most important data point as far as the US economy is concerned and hence likely to be viewed with a lot of interest to see if the economy is recovering and whether the dollar would be able to gain a bid as a result of that.