USD/CAD Forecast May 8, 2017, Technical Analysis

The USD/CAD pair broke down significantly during the day on Friday after initially tried to rally. The 1.38 level offered far too much in the way of resistance, and that being the case it’s likely that this pullback is more of a technical move than anything else. When you look at this chart, it is still very much in an uptrend but the move on Friday was rather drastic. This may have more to do with the oil market, because of the jobs number. The jobs number suggested that employment is picking up in the United States, and that could drive up demand for crude oil. However, I think longer-term crude oil has some major headwinds ahead of it, and the US employment won’t be enough to change that. With this being the case, I think that we will continue to go lower but I recognize that there was a vital resistance barrier broken recently, and I think it will start to offer support.

The 1.36 handle.

The 1.36 handle below I think will be the “floor” of the market. When you look at the oil chart, it bounced to form a very bullish candle during the day but it has a massive amount of resistance above at the $47 handle. With this being in mind, I believe that this move correlates nicely with the oil market, and should offer nice buying opportunity at lower levels. I am stepping away from this market for at least a session, maybe 2. I do think that value offers itself later, so I will keep you up-to-date as to what I’m doing. Selling could be done, but quite frankly you would have to be very quick to get away with that. Patients will pay off in this pair.