USD/CAD Forecast November 3, 2017, Technical Analysis

The US dollar fell a bit during the day on Thursday, reaching down to the 1.28 level underneath. A bounce from there should send this market to the 1.29 level above, and then perhaps the 1.30 level above. That is an area that on longer-term charts means quite a bit and should be something to pay attention to. If we can break above that level, the market should continue to go much higher, continuing the overall uptrend. I think that pullbacks are opportunity to pick up value in the US dollar, as it is one of the strongest performing currencies in the world in the short term. We also have the jobs number coming out today, coming from both countries. This will cause quite a bit of volatility in this pair, so pay attention to the announcements, because if one of them are a bit soft, the market should continue to run away from that side of the equation. I think longer-term we are still looking at a US dollar strengthening under most circumstances, because quite frankly even with oil rallying lately, the US dollar continues to be up on the Canadian dollar.
In the 1.25 level underneath should be the bottom of the uptrend, so if we can stay above there I think it’s essentially a market that you need to be buying. Short-term selling might be possible if you are quick enough, but quite frankly I prefer to follow the larger order flow, because it keeps you out of unnecessary trouble. I recognize that the 1.30 level above is massively resistive, so it may take several attempts, meaning that we may have to pull back several times to finally clear that barrier. If oil markets rollover significantly, that could be reason enough to send this market higher on top of the unwinding bond trade that we previously had.