The US dollar has rallied significantly against the Canadian dollar over the last couple of sessions, but has run into a bit of noise at the 1.27 level. I believe this is minor, as there is much more resistance of the 1.28 handle above, and of course the 1.30 level after that. The Canadian dollar is going to suffer at the hands of a housing bubble breaking in Toronto, and of course the bond trade unwinding as it looks like the Federal Reserve will be forced to raise interest rates much quicker than people had been betting on recently.
I believe that this is a market that you can continue to buy dips and, and I have a target of 1.30, but quite frankly the most significant thing on this chart is that we held a weekly uptrend line the goes bank a couple of years. I believe that this could be a longer-term “buy-and-hold” trade for those of you who are resilient and have the wherewithal to hang onto that type of situation. I myself went long early Friday, and plan on hanging on to this trade for several handles, perhaps even several years if the marketplace shows itself to be resilient enough. I have no interest in selling, I believe that this market is also susceptible to upward pressure if the oil markets rollover, as they have been known to do this year.
Written by FX Empire