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US dollar falls against the Canadian dollar only to rally again

Christopher Lewis

The US dollar fell during the trading session on Friday, dipping below the 1.2750 level, showing signs of life yet again as we have rallied a bit, perhaps reaching towards the 1.28 level. If we can break above that level, the market should continue to go higher, perhaps reaching towards the 1.30 level over the longer term. I think a lot of this comes down to the US dollar and its interest rate expectations, but the bounce was in direct reaction to the Canadian employment numbers being so poor. Because of this, I believe that the Canadian dollar may soften a bit, and we could continue to go higher here. Obviously there is a correlation that we need to pay attention to with the crude oil markets, so that of course will have to be front and center in your thinking.

I think we break above the 1.28 level, we will see an increase in the momentum, as the 1.2750 level has been crucial. Otherwise, if we break down below the lows again, that could send this market to go down to the 1.25 level rather quickly. Based upon longer-term charts, I think the only thing you can count on is a lot of volatility. However, if we break down below the lows, then I think the 1.25 level will be a massive amount of support just waiting to happen, not to mention the fact that there is an uptrend line just below there as well. I think the 1.30 level above is massive resistance, so we break above there it would send in fresh money for a longer-term uptrend.

USD/CAD Video 14.05.18

This article was originally posted on FX Empire