Yahoo Finance USD/CAD Daily Fundamental Forecast – January 16, 2018
The USDCAD pair continues to trade in a weak manner but the traders would be well advised to see if there is a bounce in the pair for the short term. There is a growing feeling among the traders that the weakness in the dollar that is seen across the markets is likely overextended and that is the reason why some part of the market expects the dollar strength to return in due course of time.
USDCAD Under Pressure
This is something that the traders have to take care though it appears as though, even if the dollar were to regain back some of its strength, it is likely that the strength of the CAD would also come forth and this would continue to keep the pair under pressure or even if there is a bounce, it is going to be much smaller and much more short lived than what you see in the other pairs. If at all there is a bounce, then we could be looking at the 1.2380 region as the one where there is likely to be a bounce as the previous bounce also took place in this region and this could then form a double bottom.
But for that to happen, the dollar has to gain in strength immensely as the CAD is unlikely to give way anytime in the short term. In fact, the strength of the CAD is only expected to grow in anticipation of a rate hike from the BOC in a month or so. The BOC is known to surprise the markets with its bullishness and so it remains to be seen whether it does so next month. The oil prices also show no signs of reversal and hence it is going to take a large effort from the dollar bulls to reverse the move lower.
Looking ahead to the rest of the day, we do not have any major news from the US or Canada for the day but the US traders return back to their desks after the long weekend and hence it is likely that we see a lot more volatility in the pair today, as compared to yesterday.
This article was originally posted on FX Empire
