USD/CAD Forecast May 29, 2017, Technical Analysis

The USD/CAD pair had a volatile session as we fell during Friday’s trading. However, there is a certain amount of choppiness in this pair as it is highly influenced by crude oil markets, which of course have been very volatile over the last couple of sessions. As oil falls, this pair typically rallies, and I think that’s what’s going to continue to be how we look at this market. It will be a proxy for crude oil as per usual, and I believe the crude oil markets may rally for a little bit, but will continue to struggle as the oversupply of oil should continue. After all, the higher prices go, the more likely Americans and Canadians are willing to throw more shale oil into the world’s market. Not only that, you have Mexicans willing to drill as well. In other words, it is a market that will be highly influenced by the crude oil markets, so having said that I think that you will have to pay attention to both in order to trade this currency pair.
Volatile days ahead
I believe that we will continue to see volatile days ahead, as the market continues to question whether or not OPEC and control price. I personally don’t think they can, and I think there is an inflection point that the market is coming to the realization of, the day when OPEC loss control. I think it may be very noisy, but given enough time I believe that the Americans producing more than 10 million barrels a day is coming soon, and that will continue to work against the efforts of countries like Saudi Arabia. OPEC has a long history of failing to stay in line when it comes to production cuts, and I think sooner or later that will come into play as well.