USD/CAD Forecast June 12, 2017, Technical Analysis

The US dollar fell precipitously against the Canadian dollar after initially being very stable during the day on Friday. This was in reaction to a much stronger than anticipated employment number coming out of Canada, and this sent the market looking for the 1.34 handle. This is an area that has been supportive in the past and although the employment figures do boat well for Canada itself, the reality is that most traders will view this as a way to play the oil markets by proxy. Because of this, I believe that the downside is probably somewhat limited, and it will only be a matter of time before the buyers jump back into this market as the crude oil markets look so soft. Granted, I believe that the crude oil markets are probably due for a short-term bounce, and that could add to a little bit of the selling pressure, but longer-term I still believe that oil markets are in a significant amount of trouble.
Wait for stability
I believe that the best way to trade this market is to simply wait for stability to get involved. I think that selling here would be a bit too late, and would be essentially “chasing the trade”, one of the best ways I know to lose money. If we do bounce from here, I think that eventually will reach towards the 1.35 handle above, which is ecologically important. There’s also a significant amount of noise just above that level, so I would expect it to offer a bit of a fight. Once we break above the 1.3525 level though, the market will be then free to go higher. Looking at a daily supportive candle is probably the best way to play this market, as the one hour chart looks to be very volatile.
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