The US dollar has been noisy during trading on Friday, initially dipping down towards the 1.26 level before finding buyers. The market has been extraordinarily choppy, but after seeing this type of rebound, I suspect that the market should continue to go higher. I also like the fact that the overall oil markets look likely to roll over, I think that the Canadian dollar will soften due to that. There is the negativity surrounding the US dollar, but this market tends to pay more attention to oil than anything else. The oil markets have rallied but turned around to show signs of bullish pressure.
The market pulling back will continue to find plenty of buyers, and I believe there is a bit of a “floor” in the market at the 1.25 level. Ultimately, this is a market that should continue to find buyers, as there has been so much in the way of trouble with oil. Oil is oversupplied, and of course American drillers continue to pummel the markets with more supply. There will be a lot of noise in this market, but I still believe that the driving force of falling oil prices give us an opportunity to pick up value when we drop. Longer-term, I believe that the 1.30 level will offer a significant amount of resistance, so it may take several attempts to break above there, but I would fully anticipate seeing that happen. This could be one of the more volatile pairs over the course of the next several months, so be advised that small positions are probably desirable.
USD/CAD Video 26.02.18
This article was originally posted on FX Empire
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