The US dollar has been very noisy over the last several sessions, with a general downward attitude against the Canadian dollar. However, I think that the recent test of the 1.30 level shows that we could see an explosion to the upside and I think that the short-term pullback will offer value given enough time. This will coincide nicely with the oil markets selling off, but the attitude of the markets continues to be very noisy.
USD/CAD Video 13.03.18
If we could break above the 1.30 level, the market will probably go much higher, but there is a lot of noise just above there. It’s not to be easy but given enough time I think that we could go to the 1.33 handle. I think that the 1.25 level underneath is the “floor” in the market, and ultimately, I would be surprised if we go much lower than that level. The attitude of the markets will continue to be difficult to handle, but if you follow oil markets it will typically give you the right perspective. Remember, there is a negative correlation between the two markets.
With the economic announcements coming out of the United States of the next couple of days, it could be difficult to get traction, but eventually we will get the clarity necessary, but at this point I think that the overall proclivity is to find buyers over the next several sessions.
This article was originally posted on FX Empire
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