USD/CAD forecast for the week of August 17, 2015, Technical Analysis
The USD/CAD pair fell during the course of the week, but as you can see found enough support near the 1.30 level to turn things back around and form a hammer. This of course is a very bullish sign and quite frankly this is one of her favorite currency pairs at the moment. We’ve had a decent breakout to the upside, and have now tested for support a couple of times. The hammer is the second time that we’ve seen this form in the last 3 weeks, so we believe that the market is ready to take off to the upside for the longer term. We believe that a break above the top of the hammer is of course a very positive sign, and the market should then head towards the 1.35 level given enough time. That’s not to say that is going to go there right away, but we believe that every time this market pulls back there will be interested parties in going long.
The crude oil markets certainly don’t help the Canadian dollar at this point in time now, so having said that we believe that the US dollar should continue to strengthen against the Canadian dollar as we have quite a bit of bearish pressure on the oil markets themselves. On top of that, the US dollar continues to strengthen in general as the world’s market are concerned about various issues. After all, the US economy is growing, but so many others are barely squeaking along. With that, we feel that this is a bit of a “perfect storm”, and we do not expect some type of massive melt up in the process.
We believe that support runs all the way down to the 1.28 handle, and as a result we have no interest in selling until we break well below that level on a significant move. In the meantime, we look at every dip as value in the greenback, and continue to purchase it time and time again as commodity markets simply do not warrant anything else.