USD/CAD Price Forecast October 17, 2017, Technical Analysis

USD/CAD daily chart, October 17, 2017

The US dollar initially went sideways against the Canadian dollar on Monday, but then shot through the 1.25 handle. Ultimately, the markets did show a lot of volatility later in the day, but what I find interesting about this move is that a lot of it was against the flow of the oil markets. Oil markets rallied while the US dollar did as well, that doesn’t typically happen, and that’s a very negative sign for the Canadian dollar from what I can see. I recognize that the 1.25 level underneath will continue to be a magnet for price, but given enough time I think we are going to continue to rally based upon how suspicious the Canadian dollar is acting.

I think if we can break above the 1.2550 level, at least on a daily close, the market should continue to go much higher, perhaps reaching towards the 1.2750 level next. The markets will be volatile of course, because not only do we have oil markets slamming around, but we also have the back and forth action going on. Because of the massive amounts of volatility, building up a position slowly is probably the best way to go. It’s not until we were to break down below the 1.24 level that I would be bearish again, and the recent action, although very difficult to deal with, does look likely to signify that the markets will try to build up some type of base. I think oil markets are coming relatively close to massive resistance, and I think that could also put plenty of bearish pressure on the Canadian dollar also. Remember, the Bank of Canada raised interest rates, but then set almost immediately that interest rate hikes shouldn’t be thought of as automatic. Because of that, we are starting to see the market turned completely around against the Canadian dollar.

Written by FX Empire