USD/CAD Forecast June 30, 2017, Technical Analysis

The US dollar fell against the Canadian dollar during the Thursday session, as we continue to test the psychologically important 1.30 level. The breakdown in this pair can be attributed to a couple of different things, not the least of which is that crude oil has been bouncing recently. On top of that, we are starting to see bond traders favoring Canadian bonds over US bonds, in the belief that perhaps the Canadian central bank is going to have to raise rates much quicker than anticipated. This of course has a flow of money heading into Canada, but do not forget the oil correlation. I think that although oil has shown some strength as of late, it is still very vulnerable to selloffs, and that could have this market turning around in very short order.
As many of you know, I go to trial quite often. I will be there again this weekend, and I will of course continue to have my eyes on the housing market. I believe that eventually this becomes a major issue. It’s already a “known known” for traders, but the bubble hasn’t quite popped yet. Once it does, the snapback in this pair could be brutal. Having said that, we have broken down below an uptrend line on a weekly channel so that is a very negative sign. I believe that rather soon, this could be one of the more interesting currency pairs, but the next several sessions might be a bit slow as the Americans are getting ready for Independence Day, and Canada Day is this Saturday. Both countries will have most people away from work, so that of course will influence how the pair trades. This could be one of the more interesting markets over the next several weeks.