The US dollar continues to go sideways against the Canadian dollar, after rallying so hard during the previous week. The market will more than likely continue to tread water over the next couple of sessions, as the Federal Reserve interest rate announcement during the Wednesday session should be vital as to where we go next. It’s not so much whether we get an interest rate hike, most people believe we will, but it’s more about the statement afterwards, and whether it sounds hawkish or dovish. If it sounds hawkish at all, that should send this market through the 1.29 handle, and looking at the 1.30 level longer term. The 1.30 level should be resistive, so breakout above there would be very important.
Pullbacks of this point should be buying opportunities, unless of course the Federal Reserve either doesn’t hike interest rates, or sounds very dovish. I doubt that’s going to be the case, so I think it’s only a matter of time before the uptrend continues that we had seen previously. If the oil markets continue to show signs of exhaustion, that could also be a nice buying opportunity in this pair as well. I believe that the 1.27 level below is support, so pullbacks towards that area will probably bring in value hunters. The noise should continue, as the economies are so highly intertwined, but at the end of the day this is about the Federal Reserve and the crude oil markets. I believe we are starting to form a nice longer-term uptrend again.
Written by FX Empire