The US dollar initially tried to rally against the Canadian dollar but ran into a bit of trouble near the 1.30 level above, an area that of course is a psychologically significant number, and of course structurally important as well as it is a large, round number. I believe that the market rolling over and breaking down below the bottom of the weekly candle could send the US dollar back down towards the 1.25 level, an area that should attract a lot of attention. If we break down below the 1.24 level, that could roll everything right back over.
The alternate scenario of course is that we break above the 1.30 level, which would be a very bullish sign. I believe that the market will continue to find volatility in this range, as it is an area that has been choppy. Oil markets will have their influence as per usual, as the Canadian dollar is so highly leveraged to them. By being patient, you should be able to find a trade that is good for several handles. The market will continue to be noisy, but I do believe that this is an important enough level to pay attention to that we could be setting up for a huge move for those who are willing to let the market tell them which way it wants to go longer term.
USD/CAD Video 12.03.18
This article was originally posted on FX Empire
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