USD/CAD Daily Fundamental Forecast – September 11, 2017
The USDCAD bounced off the lows of its range on Friday as a combination of falling oil prices and bad incoming data from Canada helped to weaken the CAD across the board and this helped the long-beaten USDCAD pair to get itself off the floor and dust itself off. This does not mean that a full recovery is on the cards for this pair but it is indeed something to get started with and probably provides an opportunity for the bulls in the pair to get out of their longs before the next leg lower.
USDCAD Bounces Off Range Lows
On Friday, we had the employment report data from Canada and though the headline number showed that the data was better than expected, a reading of the minor details revealed that the biggest gain was in the low paying sector while the high paying sector showed a much larger number of loss of jobs. This led to a sell off in the CAD which helped the pair to climb through 1.21 and it now trades just below 1.2150 as of this writing. We continue to view this only as a correction of the downtrend and not the beginning of a recovery in the pair.
The oil prices also moved lower during the course of Friday as the Hurricane Irma lashed through the US and this affected the supply and the demand in the region which has led to a temporary fall in the oil prices which placed additional pressure on the CAD. But the hurricanes are expected to affect the US economy as well and lead to lower economic numbers in the coming months which is likely to weaken the dollar. Also, we are likely to see the Fed sit more on the sidelines as the US recovers from the effect of these hurricanes and this would put the dollar under pressure even more.
Looking ahead to the rest of the day, we do not have any major news from Canada or the US over the day and hence we can expect some consolidation with a bearish bias during the day as the pair ranges on either side of 1.21.
This article was originally posted on FX Empire
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