The US dollar rallied against the Canadian dollar during Monday, breaking above the 1.30 level. This is a bullish sign, as the 1.30 level needed to hold to keep hopes of bullish pressure alive. Remember that the Canadian dollar is often traded as a proxy for crude oil, so make sure that you are paying attention to what’s going on in that market. As you can see, I still have the weekly uptrend line marked on the chart, which is closer to the 1.32 handle. We broke down below there, so I still think that there is a significant amount of bearish pressure. However, I recognize that a move above the 1.3050 level could be a short-term buying opportunity.
Today is Independence Day in the United States, and that will work against volume in this pair, as the USD/CAD pair is heavily weighted towards North American trading. Unless there is some type of massive move in the oil markets overseas, it’s very unlikely that this pair will be volatile today, and could be a sideways type of market. Because of this, I’m not expecting much today, but I am paying significant attention to the 1.3050 level above, as it of course would be a major level to break for the buyers. And exhaustive candle between here and there could be a selling opportunity, but I’m not looking for much in the way of momentum today because of the volume concerns with most traders being away from their trading desks due to the holiday.
Written by FX Empire