USD/CAD Weekly Price Forecast – US dollar rally significantly against Canadian dollar this week

As we are starting to see tariff supplied around the world, Canada was a victim of US tariffs and wrath during the week. We initially gapped higher during the week, came back to fill that gap, and then have exploded to the upside. We are testing the 1.32 level as I record this market, perhaps the top of a potential daily channel. However, the fact that we are closing at the top of the week tells me that the market is ready to continue going higher, and I think that short-term pullbacks should continue to offer buying opportunities. The 1.30 level should now be supported, and if we can get a bit of negativity going in the oil market, that could send this market much higher as well.

Interest rate differentials favor the US dollar anyway, as we have at least two interest rate hikes coming out of the Federal Reserve this year. By contrast, the Bank of Canada is more than likely going to raise interest rates at best one time between now and the end of the year. There is a housing bubble in the greater Toronto area, and that of course has a lot of people concerned as well. I like the idea of buying this pair but realize that this pair does tend to be rather choppy, so I would be very cautious and patient when adding to my position.