The USD/CAD pair was slightly negative during the day on Monday, but is starting to find support near the 1.3425 handle. The market has been in a downtrend for some time, and of course is driven heavily by the crude oil markets in general. And the very thin Monday trading, crude oil markets rose and that of course put bearish pressure on this pair. The real test of course will be today when the full volume comes back into the marketplace, and that will most certainly influence where this market goes after that. I think that if we can break above the 1.35 handle, the market should continue to go much higher than that. Alternately, if we make a fresh, new low, then I think the market breaks down significantly, perhaps reaching towards the 1.33 handle. Nonetheless, it’s going to be very choppy, and this being the case, you are going to have to be very careful overall.
Recently we have seen a bit of a downtrend, but with all of the noise that we are seeing in the crude oil markets, that could change very rapidly. If the oil markets can break above the $50.50 level in the WTI grade, I believe that this market will start falling apart rather significantly. Alternately, if we break down below the $50 level again, then it’s likely that the pair will rallied to the upside and that gives an opportunity for continuation of the longer-term uptrend that had been so significant and prevalent until the last couple of weeks. It will be interesting to see what happens next, but I suspect you are probably best served waiting on the sidelines for the correlating move in both markets before putting significant money to work.
Written by FX Empire