USD/CAD Price Forecast January 26, 2018, Technical Analysis
The US dollar fell again during the trading session on Thursday, breaking down below the 1.23 handle. However, we have bounced from there, and it looks likely that we are going to try to get a bit of a footing underneath. The 1.2375 level above should offer resistance, so I’m waiting to see if we get some signs of exhaustion that I can take advantage of. I recognize that there is a significant amount of support below, starting at the 1.21 handle, and extending down to the 1.20 level which of course is psychologically important.
The market continues to show signs of negativity, and I think that with the oil markets rallying, it’s likely that we will continue to go lower in this market. I believe that the 1.20 level should be rather supportive though and could be the “bottom” of the market. If we were to break down below there, the market could go much lower, and that could unwind the entire attempt to rally over the last couple of years. If we do break above the 1.2375 handle, the market probably goes looking towards 1.25 level, which is massively resistive as well. There will be a lot of noise regardless, that’s typical of this pair. But we obviously have a downward slant, at least until we break above the 1.2375 level. With the typical noise in this market, you may wish to use smaller trading positions than usual. Follow oil, it should give us a heads up on where to go next.