USD/CAD Price Forecast January 18, 2018, Technical Analysis

The US dollar rallied a bit during the session on Wednesday, reaching towards the 1.2450 level, before dropping about 50 pips. The market looks likely to continue to be very noisy, and that makes sense considering that the economies are so intertwined. Pay attention to the oil markets, they always have their say when it comes to the value of the Canadian dollar, as the Canadian dollar is considered to be a proxy for the market. I look at the 1.25 level above as significant resistance, but if we can break above there it would be a very good sign that we are going to try to reach towards the 1.26 level next.

Ultimately, if we break down below the 1.24 level, I think that it’s only a matter of time before we go down to the 1.21 handle, followed by the 1.20 level after that. The market participants continue to be very jittery, as there are concerns about the NAFTA agreement going forward as well. I think that the market participants will continue to be very easily influenced, and I think that the market is going to continue to be more of a short-term type of situation.

I believe that the market continues to offer trades on the one-hour chart, but if you tried to hang onto a trade for more than a day or two, you’re going to run into trouble. That might be the theme going forward, at least until we get some type of large move in the oil market or clarity coming out of the NAFTA negotiations.