USD/CAD forecast for the week of October 23, 2017, Technical Analysis

The US dollar rallied during the week, slicing through the 1.26 level on Friday against the Canadian dollar. This is a very bullish sign, and should send this market towards the 1.28 level above. If we can clear that level, then I think the next obvious target will be the 1.30 level, which of course is a large, round, psychologically significant number. The look of the candle is very healthy, and I think we will now start to find plenty of support at the 1.25 level underneath. Longer-term, you should pay attention to the oil markets, because they have a massive amount of influence on the Canadian dollar. At the same time, we have the likelihood of a hawkish Federal Reserve Chairman coming out of Washington DC, and that has been part of what has put a bid under the dollar.

I think that pullbacks of this point should be thought of as buying opportunities, unless of course we break down below the 1.24 handle, which would show significant negativity. A breakdown below there should send this market to the 1.21 handle underneath, which has been supportive in the past. I think that the market continues to be choppy overall, but I think that we are to continue to see a bit of strength going forward, and it’s likely that the US dollar continues to get a bit of a bid around the world. If that’s the case, and oil roles over big, that’s the perfect combination for this pair to rally from here, and reach to higher levels. Ultimately, I have no interest in trying to sell this market until we break down, as the candle for the week has been so strong and positively bullish. Otherwise, I fully anticipate that if you are patient enough, you should see the market rally.

USD/CAD Video 23.10.17