The US dollar has gone sideways against the Canadian dollar during Tuesday trading, dancing around the 1.26 level. Obviously, oil markets will have their influence on the Canadian dollar, so you should pay attention to what’s going on in that market. As oil falls, that should put this market in a bullish pressure type of move, as the Canadian dollar will sell off. I believe that the market will eventually continue to go towards the 1.29 handle above.
The 1.29 level is the beginning of significant resistance that extends to the 1.30 level above. That’s an area that I think is going to be very difficult to crack above, but once we do this market could go much further, perhaps becoming more of a “buy-and-hold” market. Any time we pull back, I think it will be a buying opportunity, especially after we break out above that level.
I see the 1.25 level underneath as potential support, and as you can see on the chart, I have an ellipse that shows where we have seen a lot of interest in the market, and I believe that is one of the main reasons why we are going to have so much support in this area. In general, I believe that the market will probably grind its way higher, and not shoot straight up in the air. That’s typical for this market though, it tends to grind for long periods of time, and then make sudden moves. I believe that as we continue to see overall oversupply in the crude oil market, this will continue to be a market that is looking for higher levels.
Written by FX Empire