USD/CAD Price Forecast January 23, 2018, Technical Analysis

The US dollar rallied a bit during the day on Monday, then pulled back slightly. It looks as if we are consolidating between the 1.24 level on the bottom and the 1.25 level on the top. This is a market that is going to continue to be very difficult, because of several different moving pieces. NAFTA is potentially a thing of the past, and that will hurt the Canadian economy. If we break above the 1.26 level, then it is obvious that the Canadian dollar is going to get pummeled.

Oil markets have been very bullish, and that of course puts a lot of downward pressure on this market. The US dollar has been falling against many other currencies around the world, so as you can see – there are a lot of different reasons for this market to move in different directions. I think if we can break down below the 1.2350 level, then we should fall towards the 1.21 level, which is a significant amount of support extending down to the 1.20 level. A breakdown below there has this market breaking down rather rapidly. Otherwise, we could recover back towards the 1.29 level above which has been massively resistive. I think the one thing you can count on is that short-term trading continues to be the most obvious way to play this market, especially if you can keep your leverage low and if you can be nimble enough to take advantage of the choppy trading conditions.

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