USDCAD continuedto trade within a tight range last week as it marked the end of the month and it also was the week when there was no push fundamentally in any direction for the pair to make a decided move. We had the dollar strengthen across the board due to strong data and some fundamental events but this was offset by the strength of the Canadian dollar as well and this helped to keep the USDCAD pair in a tight range.
USDCAD Gets Ready to Make a Move
The pair has been trading within this range for about 2 weeks now as the bulls have not been able to push through the glass ceiling that seems to have formed around the 1.35 region. The pair failed to break through this region once again, a couple of weeks back and this failure in this region is becoming all too familiar for the bulls and everytime the move up fails, it means that the sellers in that region become more and more confident of that region holding and they add to the sells and the region also begins to attract newer sellers making it even more stronger when the price reaches there next time.
Last week, we saw the oil prices gain in strength and this usually helps the Canadian economy which depends a lot on the oil prices and hence, this helped the CAD to remain buoyant as well. The GDP data from Canada was also strong and this added to the strength though the BOC sought to temper down the euphoria by saying that the economy was still under strict monitoring and it would be a while before it can be said that the Canadian economy is truly recovering. This helped to keep the USDCAD pair under check despite the strength in the dollar.
Looking ahead to the coming week, we have a series of data from the US including the FOMC meeting minutes and also the NFP later in the week and we also have a range of Canadian data including trade balance and employment reports. This should ensure that there is a break in the range of this pair in the coming week and if and when that happens, the move is likely to be large considering all the consolidation that has been going on in the USDCAD pair over the last 2 weeks.