USD/CAD Forecast – March 1, 2017
USDCAD has risen by around 140 pips since the close on the previous day, clearly establishing the fact that the bulls are back firmly in control of this pair. This is something that we have been saying for the past few days in our forecasts and the best proof that such a thing was about to happen was the way in which the bulls have been defending the region around the 1.3000-1.3060 despite the severe pressure that the pair had been in, over the past few weeks.
USDCAD Likely To Strengthen Further
The results of this successful defense have been seen in this week as the bulls have regained control over USDCAD. There are a few reasons attached to why this uptrend has started over again. One of them is that we reached the month end and there was some month end currency flows. Also, we have the Fed members continuing to say that a rate hike is still quite possible in March which has helped to support the USD. Then, overnight, we had Trump say that he plans to introduce massive tax cuts for the corporate and the middle class and also increase spending, which has helped to strengthen the USD across the board.
We can safely expect this pair to consolidate till the release of the decision. Though we have the manufacturing PMI data from the US is also due for release, it is unlikely to have much of an impact on the USDCAD prices as the market would be focussed on the repercussions of the Trump speech and the BOC statement later in the day.