USD/CAD forecast for the week of January 15, 2018, Technical Analysis
The US dollar continues to be very volatile against the Canadian dollar, as markets look very likely to go back and forth in the short term. Obviously, this is a market that is highly susceptible to what happens in the oil markets, but I think that the reality is that money is starting to flow from North America and into Europe. This is seen in the EUR/USD pair and the GBP/USD pair as well. The US dollar and the Canadian dollar both are starting to fall against European currencies, so I think it will continue to be an issue. That causes a lot of noise in this pair, but the easiest target or signal that I see is that if we can break above the highs of the week that just closed, that would be a good sign that we are going to continue to go towards the 1.29 handle above, as it would be clearing a gap.
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Otherwise, we could go back and forth in the short term, and I think we need to see a bit of clarity before putting serious money to work. It makes sense for me to wait for a sudden and serious moved to get involved. I think this is going to be a situation where we could see dollar strength, which flies in the face of most other currency pairs. Although, I would also be very cautious about putting money in large droves. I believe that taking advantage of momentum is probably the best way to go, and then adding as the market proves itself to you. If we do break down, I suspect the 1.2 level will be a floor.