USD/CAD Forecast June 7, 2017, Technical Analysis

The USD/CAD pair initially dropped on Tuesday, but found enough support at the 1.3450 level to bounce. We found resistance at the 1.3490 level after that, and have simply gone back and forth cents. This is not surprising, because we get the Crude Oil Inventories announcement coming out for the session later today. In that almost always has a massive influence on this currency pair. If oil rises, typically this pair falls and of course the exact opposite is true. I personally believe that crude oil markets are going to continue to find bearish pressure over the longer term, so given enough time I would anticipate that this market rallies. However, in the meantime it’s likely that the choppiness will be extreme. I believe that the market should continue to be very bullish, but this will be in the longest-term outlook possible.
The importance of 1.35
I believe that the 1.35 level is very important for this pair, and if we can break above there we will go looking for the 1.36 level next, which is even more important on longer-term charts. I have no interest in shorting this market, a least not until we can clear the 1.3400 level underneath, which would be a very bearish sign. I believe that a lot of the noise in this pair will come from the situation with OPEC production cuts, and of course the Gulf states and their current drama between Qatar and Saudi Arabia. All of this is putting bearish pressure on crude oil, and therefore I think will continue to give this pair the opportunity to rally from time to time. The Crude Oil Inventories announcement coming out today will be vital, and the reaction should give us an idea as to where we are going next.