Daily Forex Reports | by FX Empire | Tuesday, 29 September 2015 06:19 UTC
The USD/CAD pair broke higher during the course of the day on Monday, testing the upper reaches of the shooting star that had formed the last week. Because of this, looks like the market is ready to go higher, and we of course are buyers. We recognize that pullbacks will happen from time to time, but look at them as value as the US dollar is without a doubt one of the favored currencies around the world. On top of that, the Canadian dollar has been very soft in general lately, so we feel that this is a bit of a “perfect storm” that is setting up at the moment.
The candle itself looks very healthy, as we are closing towards the top of it, and this was an area that previously had not been able to be overcome. With that, we feel that the market will continue to go higher as it shows real resiliency to go a bit to the upside at this point in time. We feel that there is plenty of support below as well, especially near the 1.33 handle, so having said that it is difficult to imagine selling this market under any circumstance of the point. On top of that, you can see a lot of choppiness all the way down to the 1.30 level, so it’s almost impossible to imagine how to short this market at this point in time.
We believe that the 1.35 level is the next target, and with that it’s probably only a matter of time before we reach that area. We also believe that we should break above the level going forward, and continue a longer-term “buy-and-hold” type of situation. At this point in time, we also recognize that the oil markets do not offer enough bullishness to work in favor the Canadian dollar at the moment, and as a result we feel that the longer-term trend should continue to go higher and that every time we pullback it should offer perceived “value” in the US dollar as it is so strong overall.
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