The USDCAD pair corrected below 1.25 and continues to trade below that as of this writing. The pair did take a brief look over this region yesterday but with the lack of any momentum, it was natural for the pair to lose steam on the way up and it fell down during the course of the trading yesterday. We believe that this choppiness is likely to continue for today as well.
USDCAD Chopping Around
After bouncing strongly and steadily from the 1.2070 region for the past couple of weeks or so, the pair has been quite directionless since the beginning of the week. The pieces of economic data from the US in the form of ADP employment data and the non-manufacturing PMI data did not do much to lift the dollar nor did it do anything to bring in any direction as far as this pair is concerned and like the rest of the market, we are seeing some dull trading in this pair.
We expect such choppy and dull trading to continue during the course of the day today as the market seems to be waiting for some push from somewhere so that the traders know which direction they need to take. We had mentioned many days back that such uncertainty is bound to arrive at this region if and when the pair gets here and thats what we are seeing now. This consolidation is likely to lead to a breakout in the short term and irrespective of which direction the pair takes, we are likely to see a move worth atleast 200-300 pips from here.
Looking ahead to the rest of the day, we have the unemployment claims data from the US and also the trade balance. We also have speeches from a couple of important Fed members and this is likely to keep the market busy though it remains to be seen whether this would be enough to help the market break out of its range.
This article was originally posted on FX Empire
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