USD/CAD Price Forecast February 7, 2018, Technical Analysis

The US dollar has been noisy against the Canadian dollar during the trading session on Tuesday, as we continue to see a lot of volatility in the Forex markets. We have cleared the 1.25 level and have even come back to test it again. So, at this point, I believe that the 1.25 level should offer support, and if we can stay above there I think we are more likely to continue the move to the upside. The oil markets of course will have their influence and have been struggling so that puts bearish pressure on the Canadian dollar. However, that could turn around, and if it does we will break down in this market.

Because of this, I look at the 1.25 level as the most important price level on this chart. I think that the market will probably continue to respect it, but if it does breakdown below there, we will more than likely go down to the 1.24 handle, and then the 1.23 level. Alternately, if we can make a fresh, new high then I think we go looking towards the 1.29 level. That would coincide with either a massive “risk off” move around the world, or of course the oil market selling off yet again. Keep in mind that both can happen simultaneously.

One thing I think you can count on is a lot of noise, so be aware that trade position size is paramount at this point. I would not get too aggressive until we get clarity.