The USDCAD pair continued to trade in a weak manner as the CAD gained in strength. As we have been saying in our past fe forecasts, one of the main drivers for the CAD strength has been the oil prices which have finally found some momentum and we are seeing the prices move higher in a slow and steady manner.
USDCAD Near Lows
This has provided the much needed support for the CAD which has in turn turned the USDCAD pair weak. Though we did see some dollar strength yesterday all across the markets, it did not have much of an impact on this pair which kept moving lower through the 1.26 region and now trades in the mid 1.25s and it appears only a matter of time before the 1.25 region comes under some severe test. We do not believe that the bears have the momentum on their side as yet.
So, this region should be able to hold the fall for now and we should see some consolidation happening between the 1.25 and the 1.28 regions over the next few days. It is likely that the market would then wait for more signals from the BOC on what it is going to do next. For now, the market expects the strong incoming data from Canada to help the BOC to look for a rate hike in April or atleast in June but nothing is confirmed as yet and the BOC has also not hinted on anything to that effect.
Looking ahead to the rest of the day, we do not have any major news or data from the US or Canada and so we should be able to see some quiet trading near the lows of the range with many of the traders looking to take profits ahead of the weekend which is expected to have a lot of action concerning Syria and the ongoing trade war between the US and China.
This article was originally posted on FX Empire
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