The US dollar fell initially against the Canadian dollar on Friday, testing the 1.27 level for support. We have in fact found it at these low levels, and then bounced significantly later in the day. With the Canadian GDP missing significantly, the market had to readjust after the US missing GDP during the previous session. Because of this, I think we are not ready to go anywhere significant, and therefore the overall consolidation should continue. I believe that buying this pair is going to pay dividends, least to the 1.2885 region. Short-term pullback should be buying opportunities, as the Canadian economy has quite a bit of headwind facing it.
The Canadian housing bubble is a major concern, and oil markets of course should be paid attention to as they have such a massive influence on the Canadian dollar. Looking at this noise, I believe the market should offer plenty of opportunities, if you are patient enough to looking at these pullbacks as an opportunity to get involved. This time a year is very thin volume, so be careful in this market, as the pair tends to see most of its volume in North America, which of course won’t be doing much in the way of trading over the next couple of sessions. I think that given enough time, we will go looking towards the 1.29 handle, and then eventually the 1.30 level after that. A break above that move freeze this market towards the 1.35 handle above. Otherwise, if you can break down below the 1.27 handle, the market should then go to the 1.25 level after that.
USD/CAD Video 26.12.17
This article was originally posted on FX Empire
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