USD/CAD Price Forecast November 20, 2017, Technical Analysis

USD/CAD daily chart, November 20, 2017

The US dollar has been very volatile against the Canadian dollar during the trading session on Friday, initially dipping down towards the 1.2715 level, and then exploding to the upside, reaching as high as 1.2830. We then rolled over a bit, and it now looks as if the market is simply going to bang around in this area as we are trying to pick up the upside, and turn things around from a longer-term perspective. I believe that the 1.27 level is a major support barrier, and until we break down below there on a weekly chart, I think that the buyers are probably going to continue to run the show, although they will more than likely have a significant amount of trouble doing so. That means choppy conditions, and of course the crude oil markets will make their presence known as well, as the Canadian dollar is so highly influenced by those crude oil markets.

The volatility will only pick up, because we have the interest rate differential going back and forth as the bond trade has been a major driver of this pair, but we also have the Canadian housing bubble, and of course the tax bill in the United States. There are a lot of moving pieces, but I think at the end of the day it will be oil that makes the biggest effect on this market. In general, this pair I believe is trying to get to the 1.30 handle, so I look at this as a “buy on the dips” opportunity on signs of support. I believe longer-term, the Canadian dollar will continue to fall as eventually the price of oil will, due to the oversupply of petroleum around the world. That being the case, it’s going to be very bumpy trading.

Written by FX Empire