The US dollar rolled over a bit after initially trying to rally this past week. The Canadian dollar strengthened as we broke down below the 1.27 level, right along with oil markets that are showing signs of strength. However, we recently made a “higher high”, and therefore I think that this is simply a pullback to find value. I recognize that the 1.25 level coincides nicely with the 50% Fibonacci retracement level, and it makes sense that we would find buyers in that region. I also recognize that the 1.24 level underneath is the 61.8% Fibonacci retracement level, so I think it’s only a matter of time before we see buyers come back into this market. In other words, the longer-term trader needs to be patient enough to find value in the market that looks so likely to offer it.
I also believe that the oil markets are getting a bit ahead of themselves, and it’s only a matter of time before the sellers get involved in that market as well. After all, even though we are seeing reasonably decent demand, it’s only a matter of time before more oil rigs come online to flood the market with supply again at these high levels. Also, we have concerns about a housing bubble in the greater Toronto area, and that of course is a major issue for Canada. Given enough time, I think that we are pulling back to build up enough momentum to finally break above the 1.30 level. If we were to break down below the 1.24 level though, that would almost certainly signal that the market was ready to go back to the 1.20 level, and perhaps even sell off more drastically. All things being equal though, the “higher high” has me thinking that we are still building up the necessary pressure to go higher.
USD/CAD Video 13.11.17
This article was originally posted on FX Empire
More From FXEMPIRE:
- Dow Jones 30 and NASDAQ 100 Price forecast for the week of November 11, 2017, Technical Analysis
- Silver Price forecast for the week of November 13, 2017, Technical Analysis
- DAX Index Price Forecast November 13, 2017, Technical Analysis
- GBP/JPY Price forecast for the week of November 13, 2017, Technical Analysis
- USD/JPY Price forecast for the week of November 13, 2017, Technical Analysis
- S&P 500 Price forecast for the week of November 13, 2017, Technical Analysis