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MARKETS LIVE BLOG:

STOCKS CLIMB AS DOW POSTS 8TH STRAIGHT WIN

Fed's Michelle Bowman echoes higher-for-longer mantra for interest rates

USD/CAD forecast for the week of December 25, 2017, Technical Analysis

Christopher Lewis
Updated
The US dollar had a negative week against the Canadian dollar, showing signs of exhaustion. However, overall I think that the consolidation is the bigger picture.

The US dollar initially tried to rally during the week, but rolled over to form a slightly negative candle. By doing so, it looks as if we reached towards the 1.27 level, which of course is the bottom of the consolidation area that we have been in for a couple of months. By doing so, it looks like we are ready to continue more of the same, and I think that if we can break above the 1.29 level, the market will probably go to the 1.30 level, then of course a move above there should be the 1.35 handle. Alternately, if we break down below the 1.27 handle, the market should go to the 1.25 level.

I believe that longer-term we will break out to the upside, due to an oil market that’s a bit overdone, and of course the Canadian housing bubble. I think that interest rates rising in the United States of course push this market higher in general, and I think that the 1.35 level is the overall target later next year. Expect volatility, this pair does tend to be very choppy, so having said that I believe that the longer-term trader will have to be very patient with the market, and they should add slowly at best. I think that the market should continue to be one that investors can jump into, but I think that the market should be thought of as an investment, not a trade as I’m not expecting an impulsive move in the short term. I believe that if we did breakdown below the 1.25 handle, that could have me rethink in the entire situation.

USD/CAD Video 25.12.17

This article was originally posted on FX Empire

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