USD/CAD Price Forecast January 5, 2018, Technical Analysis

The US dollar has been choppy against the Canadian dollar during the trading session on Thursday, as the last couple of days have also been very choppy. Ultimately, I think we are waiting for the jobs number from both Ottawa and Washington DC, and that will give us an idea as to where this pair will go over the longer term. I recognize that the 1.25 level is a massive support level, and if we can close below there, that’s a very negative sign and should send the US dollar much lower, perhaps down to the 1.20 level next. That’s not to say we will go there right away, but certainly that will be the target as it is a large, round, psychologically significant and more importantly, structurally important level.

Alternately, if we get a daily close above the 1.26 handle, then I think the market probably goes to the 1.2750 level next, and then the 1.30 level after that. In general, I believe this market is probably going to be one of the better trades next week, but in the meantime, you probably will need to step out of the way when the liquidity drops, and the markets go back and forth after the announcement. At the very least, you should wait for at least a few hours after the announcement to put money to work. However, as I see 5 handles being the target in either direction, I think being patient and waiting till Monday is probably the best way.

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