USD/CAD Daily Fundamental Forecast – January 23, 2017

USDCAD has undergone a bit of a correction over the past couple of days as the dollar weakened across the board. But we believe that the CAD will weaken more than the dollar in the coming weeks and months and this is likely to keep the bulls happy and the uptrend strong in the medium term. The progress has been quite slow but it has been steady and what should keep the traders happy is the fact that the pair has been bouncing up everytime there has been a correction in the prices.

We have been mentioning a target of 1.400 for the pair in the medium term and for the bulls out there, it has to be heartening to see that even when there is a weakness in the dollar, the pair has managed to bounce back everytime. Over the past couple of weeks, we have been seeing a weak US dollar but the BOC has always sought to paint a grim picture of the Canadian economy despite some decent economic data and this, coupled with the fact that the oil prices have not made any major progress so far, has kept the CAD in a weak state and this has helped the pair to remain buoyant even when the dollar has been weak across the board. We have also been maintaining that the region around 1.3000 would be key going forward and this region has the capability to make or break the uptrend. But with the BOC looking to cut rates in the coming months, we believe that the trend is safe for now and unless something dramatic happens to the US dollar, our medium term target of 1.4000 should be something that is safe to achieve in the coming months.

Looking ahead to today, there is no economic data that is to be released from any part of the world today and so we should see the pair consolidating and ranging above 1.3200 for the rest of the day with a bullish bias.