USD/CAD Daily Fundamental Forecast – April 06, 2017
USDCAD prices shot higher on the back of stronger than expected US data and also lower oil prices. Though the dollar has been weakening across the board ever since the FOMC meeting minutes was released, it has been able to to hold on to its gains against the CAD and it is trading comfortably higher, just below 1.3450 as of this writing and it looks good for more. The fact that the weekly range high around the 1.34 region has been comfortably and easily broken through, should keep the bulls happy but the strong resistance at around the 1.35 region, which has been the site of many a lot battle for the bulls, looms large ahead.
USDCAD Edges Higher
Yesterday, we saw the release of the ADP employment data from the US which came in much stronger than expected and this helped to push the pair through 1.34. Though the FOMC meeting minutes was largely disappointing with the members not touching upon the monetary policy and also not specifying how they are going to tackle the balance sheet, it did not shake up the pair much. Even the reports that the new tax plan of Trump and his team is in trouble did not do much to shake the strength of the bulls.
This was mainly due to the fact that the CAD itself was on the backfoot due to the falling oil prices which fell from its range towards the $52 region and dropped by around a dollar to trade just above $51. This was due to the release of the upcoming inventory data through the API which showed a larger than expected build up and this has led to doubts that the lower inventory data might just have been a blip and the supply and the inventory actually continues to build. This was bad news for the CAD and hence, this helped the USDCAD pair to climb higher towards the 1.3450 region.
Looking ahead to the rest of the day, we have only the unemployment claims data from the US for today and with the employment reports from both the US and Canada due out tomorrow, we do not expect the traders to shake up the USDCAD pair much today and so expect a day of consolidation and ranging.