The USD/CAD pair fell during most of the session on Friday as well got a little bit of a relief rally. However, we don’t see on this hourly chart is that we are approaching the uptrend line and a major uptrend in channel that has been in effect for a year on the weekly chart. With this, I believe that the buyers will return rather soon, and the 1.32 level could be the catalyst. Also, the oil markets falling could help this as well, as we are starting to see a bit of resistance just above. Ultimately, this is a market that finds a lot of volatility at the moment, especially considering that the Bank of Canada is sounding more hawkish these days, and that would’ve been a bit of surprise. However, the same time will markets showing switch bearish pressure works in the other direction.
This week will be crucial
If we make a fresh, new low, then I believe we are going to go looking for the 1.30 level below which is a major area to say the least. On the other hand, if we can break above the 1.3275 level, I think the market will continue to go higher, and wipe out a lot of the surprises from, is coming out of various members of the BOC. A break above the 1.35 level then send this market looking for the top of the uptrend in general, which is currently close to the 1.38 handle. I believe that eventually oil markets will be too much for the sellers in this market to overcome, and then eventually the uptrend continues so this area that we find ourselves in now may be looked at as value in the future as the US dollar got far too oversold.
Written by FX Empire