USD/CAD Price Forecast January 8, 2018, Technical Analysis

The US dollar went sideways against the Canadian dollar during the trading session on Friday, as the 1.25 level has of course been very important. Now that we have broken through there, I think there is a significant amount of bearish pressure coming, especially considering that the Canadian jobs number was better than expected while the US jobs number was weaker than anticipated. Because of this, I think that as it looks likely to bounce from here, I suspect that the buying pressure should eventually form some type of exhaustive candle that you can start shorting. A breakdown below the 1.24 level should send this market down to the 1.2250 level, followed by the 1.20 level which of course is the major area that we had seen the market bounce from. At this point, it’s very difficult to buy this market, because not only do the employment situation seem to be diverging, but we also have a significant move to the upside in the oil markets, and that of course favors a Canadian dollar as well.

If oil markets look relatively strong, this market is going to struggle to gain significant momentum, at least to the upside. I believe that we are starting to see the US dollar weakened against most currencies around the world, and that should be a theme for most of the year, and perhaps the Canadian dollar will be any different. However, the 2 economies are highly leveraged to towards each other, so I believe that even though we have seen a nice move during the Friday session, this might be a slow move.

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