The US dollar initially tried to rally during the trading session on Friday but turned around near the 1.3040 level to sell off again and drop below the 1.30 level. The 1.30 level will be very significant yet again, as it seems to be an area of major contention. When you look at the longer-term charts, this is an area that has been important more than once. I believe that the market will continue to go back and forth, but I think there is more of an upward proclivity than anything else. Pay attention to the oil markets, because quite frankly the direction of oil could be one of the biggest drivers of this currency pair.
I believe that if oil markets roll over again, we should continue to see this market to go much higher. Otherwise, if we see oil starts to rally, that could put bearish pressure on this market. Geopolitical concerns also can drive the US dollar higher, as people fled to the treasury markets for safety. One thing I think you can count on in this pair is a lot of volatility, so keep that in mind. In the short term, it looks as if we are simply trying to continue the overall consolidation between the 1.3040 level on the top, the 1.2850 level on the bottom. Because of this, keep the position size small.
USD/CAD Video 11.06.18
This article was originally posted on FX Empire