- The USD/CAD has fallen initially during the trading session on Thursday but found buyers underneath the turnaround and form a bit of a hammer.
- By hanging around the 50-Day EMA, it shows that the market is trying to at least follow some type of technical structure.
- It’s probably worth noting that the 1.35 level above is a significant round figure that a lot of people will be paying close attention to, and it’s possible that we could take off to the 1.37 level.
The 1.37 level is an area that has been important multiple times, therefore it’s likely that we would see a lot of selling pressure in that area. To break above there would be a very bullish sign, but I think at this point it’s unlikely that it’s an easy move, but it would be an attempted target for buyers.
US Dollar Still has Plenty of Fight
Breaking down from here opens the possibility of a move down to the 1.3250 level, an area that has been important multiple times as well. In fact, we have formed a bit of a “double bottom” in that general vicinity, and have it backed up by the 200-Day EMA. Keep in mind that oil seems to be all over the place, and therefore the bonus of being an oil-backed currency may not necessarily work out for the Canadian dollar in the short term. After all, even though the oil markets have been somewhat stable, they haven’t exactly been bullish.
Looking at this chart, it’s probably also worth noting that the market is currently hanging around between the 50-Day EMA and the 200-Day EMA indicators, which quite often will cause a bit of a squeeze. The market will probably take off in one direction or the other quite drastically, so as soon as we see a large candlestick, he could give us a bit of an idea as to which direction we are going to go. In this environment, we see a lot of choppy behavior, but sooner or later we must get some type of bigger move. Keep your position size reasonable, but once you start to take off in one direction or the other, then you can have a situation where you start to add to a winning trade. That being said, certainly looks as if the US dollar still has plenty of fight.
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