Here’s a chart of the loonie vs. the USD that I have posted on this blog site many times before. It’s amazing how the support line, which I drew years ago on my original post, held until late last year – and now has become resistance. Sometimes this technical analysis stuff actually works, folks (tongue in cheek!)
If you’ve followed my work for any period of time, you will know that I try not to make too many assumptions when forecasting. In the case of the loonie, were you to ask me where the next target is – I will have to say that our dollar looks to be facing a huge hurdle at the new resistance (old support) point of $0.945 USD. That ceiling, if broken, will open the loonie up to a huge upside. But like I said, I will draw no assumptions on that happening. Better to wait until 0.945 is broken before you get too bullish on the loonie (or bearish on the USD exchange rate).
The USD measured against a basket of world currencies has been range bound since 2012. The movement has been quite tight since the beginning of this year. Currently, the USD appears to be moving towards the top of its tight trading range, which on the chart below occurs around 81.50. Support lies at 79 on the chart.
Meanwhile, as you will note on the CDN$ chart above, the loonie has been selling off since hitting its technical resistance zone. Despite the excitement over our loonies recent rise, it would appear that the USD might have the upper hand in the very near term. I wouldn’t hesitate to recommend holding some assets in USD at this time – and probably won’t be too concerned about seeing a par-loonie unless the vital 0.945 resistance noted above is cracked. Given the length of time that 0.945 support (now resistance) level held, a breakout and return to par may not happen for a while.