USD/CAD Price Forecast February 6, 2018, Technical Analysis

The US dollar has spent the last couple of days exploding against the Canadian dollar, but Monday was a little tamer than what we have seen as of late. The 1.25 level above is a major barrier, so if we can break above that level I think that the pair could go much higher, perhaps reaching towards the 1.29 level as it has offered significant resistance in the past. Alternately, if we pull back from here, I think there is plenty of support near the 1.2350 level, and therefore I think that if we drop from here, we could find value hunters coming back into the marketplace.

The oil markets course has been very noisy, so you should pay attention to them to decide where the Canadian dollar should be going. If oil rises, typically that sends this market much lower as money floods into Canada for petroleum. Alternately, if we get some type of selloff in that market, that will add to the upward pressure in this pair. Beyond that, the stock market has been selling off, so it gives us more of a “risk off” attitude, while bond yields have been rising in America, that also brings demand for the US dollar as well. Once we break above the 1.25 level, the market should continue to go much higher, and offer a nice longer-term move, but at this point it’s likely we will need to see a lot of work done before we can do that. Volatility is going to be a mainstay of this pair, but that could be what we see around the Forex world.

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