The USDCAD pair pushed higher yesterday as the recovery of the dollar continued unabated all across the markets. It was indeed a challenging time over the last couple of months for the dollar bulls as it got beaten lower but now the tide seems to have turned and it is the bears that are facing the brunt at this point of time.
USDCAD Moves Higher
The USDCAD pair broke through the 1.25 region and headed higher though there was nothing major by way of fundamentals or economic data from the US. There was an underlying strength in the dollar and this is something that we have been pointing to over the past week or so and that is why we had warned our traders to be aware of this and ensure that they do not get too much drawn into the downtrend and begin to sell the pair. The base was formed in the 1.23 region and the bulls waited for their time and when the dollar swing higher began in the markets, they have ensured that they made full use of it.
Yesterday, the CAD got weaker as the oil prices dropped hard. The prices fell below the $63 region and this weakened the CAD as the Canadian economy is highly dependent on the oil prices. This was enough for the USDCAD pair and as if it was adding fuel to the fire, the pair continued moving higher towards the 1.26 region which appears now to be only a matter of time. The dollar strength and the CAD weakness is likely to last for the short term.
Looking ahead to the rest of the day, there is nothing major in the form of economic data or fundamentals from either the US or Canada and so we can safely expect some consolidation to happen with a bullish bias as the pair continues to move higher in anticipation of further dollar strength.
This article was originally posted on FX Empire
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