The USD/CAD pair tried to rally during the day on Monday, but found the 1.35 level above to be resistive. Because of this, we rolled over and try to reach towards the 1.3450 level during the day. We then bounced back to the 1.35 handle, and sellers returned again to push the market slower. The USD/CAD pair continues to be influenced by the crude oil markets, which of course look a little bit less than stellar at the moment. If the oil markets continue to sell off, this pair should go higher. I think if we can break above the 1.35 handle, the market should then go looking for the 1.3550 level and even higher. The market is highly sensitive to the crude oil markets, which of course have been dealing with a lot of volatility and concern as of late. OPEC cutting production of course is bullish, but at the same time there is more than enough oil out there to keep the market down.
Canadian Ivey PMI
During the session on Tuesday, the Canadian Ivey PMI numbers come out, and that can give us a little bit of movement in this pair as well. Longer-term, looks as if the US dollar is strengthening, as we have been in an upward channel for some time. That’s not to say that we won’t fall, but rather that longer-term traders are willing to get involved at lower levels. That being the case, I do prefer buying, but it would be much easier if we can break above the aforementioned 1.35 level, as it shows resistance being broken. I believe that the market will then go to the 1.40 level above, which is the next large, round, psychologically significant number, as markets tend to look for.
Written by FX Empire