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US dollar rally significantly on Tuesday against Canadian dollar

Christopher Lewis

The US dollar has been very volatile against Canadian dollar as we crashed into the 1.30 level, but it’s obvious that the market can continue to break out to the upside. The 1.3050 level is the extension of resistance, and if we can clear that level it’s likely that we go much higher. I think short-term pullbacks are buying opportunities in a market that is trying to take off to the upside. The 1.29 level underneath should be support, so I think that short-term pullbacks are buying opportunities that give us an opportunity to pick up value.

If we did break above the 1.3050 level, the market could go to the 1.31 handle, and then eventually the 1.33 level after that. I like the idea of paying attention to the oil markets, and it’s very likely that the markets will continue to react to that commodity as per usual. With higher interest rates in the United States and the falling oil market, it makes quite a bit of sense that we would continue to go forward and higher.

If we break down below the 1.29 level underneath, that would be a very negative sign, and we will probably continue to see value hunters keep that from happening for any significant amount of time. Longer-term, I do believe that we go to the 1.35 handle, but there are a lot of conflicting concerns out there, not the least of which will be tariffs and interest rate differentials. Expect a lot of choppiness, but I think it’s going to be more upward pressure than anything else.

USD/CAD Video 06.06.18

This article was originally posted on FX Empire