Daily Forex Reports | by FX Empire | Friday, 11 December 2015 08:51 UTC
The USD/CAD pair initially fell during the day on Thursday but found enough support yet again to turn things around and form a rather bullish looking candle. In fact, we are testing the highs and it’s only a matter of time before we break out to the upside in our opinion. That move could leave this market looking for the 1.40 level over the longer term, but there will of course be choppiness between here and there as the 2 economies are so highly intertwined. This pair tends to grind sideways for quite a while, and then eventually take off in one direction or the other quite rapidly.
The 1.35 level below is massively supportive, and we believe it’s essentially the “floor” in this market at the moment. On top of that, if the keep in mind that the oil markets look like they are very susceptible to selling pressure at this point in time, and as a result we believe this market will continue to go higher in reaction to the oil markets falling apart.
You have to keep in mind that the Federal Reserve is more than likely going to have to raise interest rates in the near future, while the Bank of Canada will be on hold for quite some time. It is not until the oil markets perk up that the Canadians have any chance at all on raising interest rates, so this is a longer-term buy-and-hold type of situation as far as we can see. In fact, the Canadian dollar falling during next year might be one of the biggest stories and the easiest place to take. It’s not only against the US dollar, but even against other commodity currencies such as the New Zealand dollar that we continue to see Canadian weakness.
The US dollar of course is one of the strongest currencies out there, as there is a lot of “flight to safety”, and with that we would anticipate that this market has multiple reasons to continue going higher and every time we pullback it should be a nice opportunity to pick up value.
Forex Market Analysis
Subscribe to Newsletter