- The USD/CAD dollar has gone back and forth during the trading session on, attempting to stop the bleeding that we’d seen as of late.
- After all, the US dollar has been beaten up by quite a few different currencies, but it appears that the Canadian dollar might be the first one to slow down.
- After all, Canada has a lot of its own issues, and of course, Canada is the United States' number one trading partner.
If we can break above the top of the candlestick, then it’s likely that we could go to the 1.35 level above, which is a large, round, psychologically significant figure, and an area where we’ve seen plenty of action previously. If we break down below the bottom of the candlestick, then it’s likely that we go down to the 200-Day EMA, which sits just above the 1.32 level, and is rising.
Regardless, I think you are going to get a bit of noisy behavior, especially as the Canadian dollar is so highly leveraged to the crude oil markets, which are approaching a massive resistance barrier. If we were to break out in the oil market, that should, at least in theory, send this pair lower, and perhaps even down below the 1.32 level. All things being equal, this is a situation where you will have a lot of noisy behavior, but that’s nothing new for this market considering that so much currency trading happens between the 2 countries.
Pay Attention to the Oil Markets
As anybody who has been on the Peace Bridge in Buffalo New York and tell you, there are a lot of trucks at any given moment crossing that border. In other words, a lot of the currency movements you see are done out of necessity, not just speculation. With that being the case, it’s always a little bit choppier to trade this market than many others. Nonetheless, we are reaching an area where you could start to see some support and quite frankly, I think Canada has a lot of issues beyond oil right now.
Inflation in Canada is very high, and of course, the housing bubble is popping. One thing that might save the Canadian dollar would be oil, but we need to see that truly take off to the upside for that to happen.
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