USD/CAD Price Forecast February 12, 2018, Technical Analysis

The US dollar has rallied again against the Canadian dollar during the Friday session, showing signs of life. The oil markets are drifting lower, while Canadian employment missed horrifically on Friday. This adds up to a strong push higher in my estimation. · FX Empire

Christopher Lewis

Updated Fri, Feb 9, 2018, 9:26 PM

With oil markets tanking around the world, it makes sense that the Canadian dollar was under pressure over the last several sessions. There was a massive spike higher during the trading in the USD/CAD pair on Friday as Canadian employment missed by over 90,000 jobs. While that doesn’t sound like much, in a nation of 30 million, it’s reasonably significant. The question is whether those job losses are going to be more of a permanent thing or is it perhaps due to seasonality.

Ultimately, this market looks as if it is trying to rally, and I think that short-term pullback should continue to offer buying opportunities. Breaking above the 1.25 level was important, at least from a psychological standpoint. I believe that if we can stay above there, the pair should continue to grind to the upside. This will be exacerbated by falling oil prices, which with the oversupply of oil reported in the inventory numbers, makes quite a bit of sense.

Longer-term, I think we are trying to build up the necessary momentum to break above the 1.30 level, which has a massive wall of resistance just below it. Because of this, I think a “buy the dips” strategy is probably the best way to trade this pair, at least until we break out. This pair is trading very highly correlated to the oil market as per usual, with a negative slant, this means of course that the pair rallies as oil falls, and vice versa. Keep an eye on the WTI market, it should lead the way.