USD/CAD Forecast October 13, 2017, Technical Analysis

USD/CAD daily chart, October 13, 2017

The US dollar went sideways initially on Thursday, did the bid, and then rallied towards the 1.25 handle. That area offered resistance, and the market started to roll over. I find this interesting considering that the oil markets also fell during this time. Because I, I think that the pair will continue to see a lot of volatility, but if we can break above the 1.2550 level, the market is probably free to go much higher. Having said that, it currently looks as if “selling the rallies” contends to be the way forward. If we break down below the 1.24 handle, the market should continue to go much lower, probably aiming for the 1.20 level over the longer term. Remember, the market had broken down significantly, but we have also recaptured most of the losses after the Bank of Canada had a surprise interest rate hike shock the market.

Since then, the Bank of Canada has suggested that interest rates are necessarily automatic, and therefore should not be counted upon. That of course has turn the market around, that with all of the noise coming out of the petroleum markets the Canadian dollar continues to be very difficult to deal with. With that being the case, I think that the market is probably best traded from a longer-term perspective, and right now it looks as if the sellers are continuing to become very aggressive. A lot of this comes down to the bond markets, which currently favor Canada, and that of course favors flow into Canada. However, those markets have been very jittery, and therefore has led to even more confusion in this market than usual. The fresh, new low could be coming, and if we get it that is a nice selling opportunity.

Written by FX Empire