USD/CAD Forecast September 23, 2016, Technical Analysis

Be USD/CAD pair broke down during the course of the session on Thursday, touching the 1.30 level. However, that area offered quite a bit of support, and therefore the large, round, psychologically significant number gives us a nice supportive barrier. We get the Canadian Core Retail Sales coming out during the day, so that could help determine where we go from here. However, I am the first person to acknowledge that the significant fall that we have seen over the last couple of days has been countered by a significant bounce from the aforementioned 1.30 level.
Oil markets of course have a massive effect on this pair, so having said that I think that it makes sense that you will have to watch both of these markets. Given enough time, I believe that the oil markets are going to fall so that should facilitate this market going higher, perhaps grinding back towards the 1.32 level, if not breaking out above there over the longer term. This is a market that is highly influenced by not only the Federal Reserve interest-rate policy in the United States, but the commodity markets as well. This is a market that a lot of traders will use as a proxy for the crude oil markets, buying the Canadian dollar when it rises, in selling it when it falls.
At this point in time, it looks as if the US dollar is one of the stronger currencies around the world, and as a result it would not be surprising at all to see the Canadian dollar lose value. A break above the top the hammer is reason enough for me to go long in this pair, and I have no interest in selling until we get below the 1.30 level, but I believe that there is more than enough support near the 1.29 level, and most certainly the 1.2850 level below is as well. With this, it’s only a matter of time before we get buyers, but a break below the 1.30 level is possibly a short-term selling opportunity.

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