The USDCAD has corrected lower ever since Friday and this is quite opposite to the way that the dollar has been moving across the markets. While it has been strengthening against the euro and few other currencies, it has been finding itself on the backfoot against the CAD as the Canadian dollar begins to strengthen due to the data.
USDCAD Moves Lower
Last week, there was a host of data from Canada including the retail sales and the CPI data and all of these data were much stronger than what was expected. This has helped to strengthen the case of the CAD and basically also helped the pair to reverse the move from the previous week when the dollar had strengthened. It remains to be seen whether this move towards the lows of the range once again would prevail as it is just a continuation of the ranging and the consolidation that we have been seeing in the pair over the last few months.
We believe that not much can be read into the move lower and not much can be read into the moves for the rest of the week as well. The market is in a holiday move and most of the traders are out on holidays and not at their desks. This would eensure that the volatility and the liquidity is very less and not much should be seen into the moves until we are in the second week of January. Also, after threatening to break out of the range highs a couple of weeks back, the pair has since settled back into range which should mean that the range is here to stay atleast for the next couple of days.
Looking ahead to the rest of the day, it has been a holiday in most parts of Europe and so the moves are likely to be slow and low. The consolidation and ranging is expected to continue during the US session.
This article was originally posted on FX Empire
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