USD/CAD Price Forecast February 22, 2018, Technical Analysis

The US dollar has rallied significantly during the trading session on Wednesday, but as you can see it looks very likely to be a bit overextended in the short term. I think that pullbacks should be buying opportunities though, as we obviously have a lot of buying pressure. I believe that the market is going to break above the 1.27 level, and then eventually go to the 1.29 level. Overall, I don’t have any interest in buying the Canadian dollar because I believe that the oil markets are overvalued, and most certainly oversupplied. With that in mind, I think that this pair continues to rally significantly over the longer term.
The 1.25 level underneath is massive support from what I can see, so therefore I believe it’s only a matter of time before we see a longer-term turn around on any type of selloff. Quite frankly, unless the oil markets rally and break down significantly, it’s very unlikely that we will be able to break down in this pair. I understand that the US dollar has been a bit soft as of late, especially considering what’s going on in the treasury markets, but in the end, I think that the strong correlation between the Canadian dollar and the crude oil markets will continue to lift this market overall. Having said that, there is a significant amount of resistance between the 1.29 level and the 1.30 level above, so it will more than likely take several attempts to accomplish a longer-term break out. With this, I am a buyer of dips.

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