The USDCAD pair continues to trade near the highs of its range and it has to be said that it is spending quite a bit of time near the highs. It is likely to continue trading there as it awaits further data from the US later in the day. The fact that it continues to trade there for several hours without any kind of breakout should make the bulls in the pair sweat.
USDCAD Moves To Range Top
The pair moved higher during the course of trading yesterday as the dollar began to gain in strength during the day after the testimony from Powell. This was the first such testimony from the new Fed Chief and hence the market was waiting to see what he thought about the overall economy and also about the monetary policy and whether he was in favor of accelerated rate hikes like some of the other Fed members.
He finally turned out to be as hawkish as he could be expected to be as he said that he was fine with the way that the economy was progressing and that he felt that the economic slowdown was nowhere nearby and that the market was correct in the fact that it was moving higher. This was enough for the dollar bulls to push the pair higher towards the range highs above 1.2750 where it trades as of this writing. We had mentioned about how the bulls are firmly in control of this pair as the dollar is expected to continue to be bullish in the medium term and thats what we have been seeing.
Looking ahead to the rest of the day, we do not have any major news from Canada but we have the advance GDP data from the US. If this data comes out stronger than expected, then we should see a breakout higher in this pair while on the other hand, if the data is weak, we should see the pair move back into range.
This article was originally posted on FX Empire
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