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

The US dollar has initially tried to rally during the day on Wednesday but rolled over significantly at the 1.3050 level to break down. This I believe is in reaction to the upcoming announcement, and perhaps people willing to step away from the market so that they don’t get burned by a surprise reaction. The question will be whether there are 3 or 4 interest rate hikes this year, and although the Federal Reserve more than likely won’t say specifically which path they are going to take, there will be people reading the statement with anticipation and trying to figure out what it means. This will cause a lot of volatility, and quite frankly will make currency trading a bit difficult. I believe that if the Federal Reserve sounds somewhat hawkish, that will send this market straight up through the ceiling. At that point, I would be looking for the 1.35 handle. If it seems to be very dovish, or at least not overly hawkish, that could send this market lower.

I believe that given enough time, we should see buyers looking for value, but the question remains as to when they will jump in? I think it’s probably best to step away from this market in the short term, but longer-term I still believe that the buyers will push this market to the upside, perhaps reaching towards the 1.35 level over the next several weeks. Obviously, things can change after the statement, so caution is the better part of valor and stand on the sidelines may not be the worst choice.