USD/CAD Daily Fundamental Forecast – November 30, 2017

USDCAD broke higher during the course of trading yesterday and now they trade comfortably above the 1.2850 region as of this writing. The pair had been in range over the last few weeks and it appeared as though it might last in that range forever. But even now, though the prices have broken out of range, the breakout has not been very strong as yet and so it has to be taken with a pinch of salt. It would need more for us to get convinced about this break.

USDCAD Moves Through Range High

The move higher over the last 24 hours has been fuelled by the weakness in the oil prices and also by the strength in the dollar. The dollar has been strengthened by the smooth passage of the tax reform bill through the Senate so far and by the look of things, it looks as though the bill would get passed and this would be a boost for the dollar in the short and medium term. This is what the market is trying to price in fully at this moment and this has been helping the dollar to move higher during this period.

On the other hand, the CAD has been rendered weak due to the weakness in the oil prices as there have been reports that the OPEC producers may not extend the production cut deal after all. This would not be good if it happens and this had cause some CAD weakness later in the day yesterday. But as of this morning, we have reports that say that the OPEC producers have extended the cut by nine more months and this has helped to strengthen the oil prices and CAD as well.

As said above, we are looking for more signs to confirm the breakout in the pair and until we see them, we are not yet convinced that the pair has turned the corner and moved into bullish mode. We do not have any major news from Canada or the US for the rest of the day and so we can expect some consolidation and ranging to happen for the day.