- The Canadian dollar rallied rather significantly against the Swiss franc during the trading session on Monday to break towards the 0.63 level.
- The market has also broken above the 50 day EMA, which of course is a very bullish sign.
- The fact that the Canadian dollar can rally against almost anything shows you just how weak the other currency is, in this case, the Swiss franc.
It looks like the 0.62 level has been a massive floor in the market, and I think it will continue to be. So as long as we can stay above that level, I do believe that this is a buy on the dips type of scenario. If we can break above that level, then it's possible that the market could go looking to the 200 day EMA, which is closer to the 0.6375 level. Anything above there then opens up a huge move towards the 0.66 level.
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Taking Off? Of Course.
I think it does make a certain amount of sense that we get this market taken off like that, because you have to think about what these currencies are attached to. Canada is attached to the United States, while Franc is attached to the European Union. Where would you rather be an exporter to? To America or to the European Union? And that's the question here. The interest rate differential does favor Canada, although it's not a huge interest rate differential anymore but it does pay at the end of the day. So that's another reason to think that perhaps we are starting to see a little bit of support here. If oil takes off, that will also help. And oil does look like it could have a fairly strong January and February going forward. So, I am bullish of this market. You should be able to get the occasional pullback to get involved.
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