USD/CAD Forecast October 23, 2017, Technical Analysis

USD/CAD daily chart, October 23, 2017

The US dollar initially trying to bounce around the 1.25 handle, but eventually saw a massive amount of bullish pressure to reach towards the 1.26 handle. We did break above there, and that is a very bullish sign. With this being the case, looks as if we are starting the next impulsive leg higher in this pair, perhaps reaching towards the 1.28 level longer term. I think that pullbacks offer buying opportunities, and if the oil markets continue to roll over, it’s likely that the Canadian dollar continues to weaken as well. On top of that, it looks as if Donald Trump is can a pick a hawkish Federal Reserve Chairman, and that makes the US dollar that much more attractive.

With recent soft economic numbers coming out of Canada, it makes sense that we will continue to see this pair rally, and the weekly candle of course is very bullish as well. That suggests to me that the trend is changing to the upside, and it’s likely that the overall attitude should continue to favor the bullish move, but I think that the choppiness in this market will probably continue. Ultimately, I expect the market to reach towards the 1.28 level, and then the 1.30 level, but that’s obviously going to take a long time to get to. If we break down below, especially underneath the 1.24 level, the market with the become rather bearish and I would become short of the market at that point. Until then, I believe that pullbacks offer value the traders will take advantage of, as the pair continues to try to find its footing longer-term. There will be a lot of headlines moving the market around, but I think that the move is already started, and should continue.

Written by FX Empire