The US dollar has exploded to the upside during the week, breaking above the top of the shooting star from the previous week, showing signs of extreme strength as the oil markets have rolled over, and we are now testing the 1.29 handle as I record this. There is an extensive amount of resistance between 1.29 and 1.30, so I think that it is only a matter of time before we get some type of short-term pullback. That short-term pullback should be a buying opportunity though, because it is obvious that we have made a “higher low”, and now look likely to try to slam into this area.
If we can clear the 1.30 level, I think the market goes looking towards the 1.35 handle, but it’s going to take some time to get there. There’s a lot of noise between here and there, but it would make sense to have that happen, especially considering that the WTI Crude Oil market falls apart. Ultimately, even if we do pull back from here I think if we can stay above the 1.25 handle, it is only a matter of time before the buyers return. It would take oil rallying significantly for this pair to roll over and break down significantly. If we do, then we could go much, much lower, but that seems to be very unlikely. Ultimately, it looks as if the uptrend is trying to reassert itself. In general, I remain bullish, but I also recognize that breaking the barrier is necessary.
USD/CAD Video 05.03.18
This article was originally posted on FX Empire
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