USD/CAD Price Forecast December 21, 2017, Technical Analysis

USD/CAD daily chart, December 21, 2017

The US dollar pulled back a bit during the trading session on Wednesday, but seems to be finding support near the 1.2850 level, an area that I think will continue to be important, but I think there is even more support below at the 1.28 handle. Because of this, I look at this is a value opportunity, and I’m willing to take advantage of this value as I believe that longer-term this pair is going to go much higher. The 1.29 level above is resistance, but then I think we will have a bigger fight at the 1.30 level after that. A break above there should send this market as high as the 1.35 handle, but it might be a bit of a choppy affair. I think that the market will eventually break out though, so given enough time I believe that the market will favor the US dollar due to the interest rates going higher in America, while the Bank of Canada looks very unlikely to raise interest rates anytime soon.

Beyond that, we have the oil markets looking a bit heavy, but even if they do rally we have to worry about housing markets in the Greater Toronto Area. That’s a bubble that starting to pop, and that could cause a serious drag on the Canadian economy. I believe that this pair is ready to go much higher over the longer term, but as the economies are so intertwined, choppiness tends to be a common aspect of this pair.

Written by FX Empire