The USDCAD corrected lower during the course of trading yesterday after trying to breach through 1.29 during the day. The breakout that we saw in the pair, after a couple of weeks of consolidation and ranging, seems to be holding for now though there has not been any major volatility or violent moves in the pair so far.
USDCAD Likely to be Tested Today
This pair has been holding steady over the last few days and the moves have been pretty decent with no major volatility. Over the last couple of weeks, the pair has been locked within a tight range between the 1.26 and 1.28 region and it is only a couple of days back that the range was broken through. But we have some crucial economic data from Canada later in the day today and this is likely to keep the traders very busy as it might bring in some volatility.
Also, this is the time when the breakout in the pair will be well and truly tested and it remains to be seen whether the pair would end the higher above the range or whether the data would be strong enough to bring a correction and force the pair back into range. That is the reason why we are not yet very confident of the breakout as the volatility and the momentum associated with the range has not been very high and hence it remains to be seen whether the break will hold.
Looking ahead to the rest of the day, we do not have any major news from the US but we have the employment report and the GDP data from Canada which is likely to bring in a lot of volatility in the pair.
This article was originally posted on FX Empire
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