- The US dollar has gone back and forth during the course of the trading session on Thursday as we continue to hang around the 1.35 level.
- Another thing to pay close attention to is the fact that the 200-day EMA is sitting right around the same area as well.
- All things being equal, this is a market that I think continues to be noisy and that does make quite a bit of sense considering that the two economies are so heavily intertwined.
- The Canadian economy moves right along with the US economy, so that is worth paying attention to.
When you look at the longer term chart, you can see that the 1.31 level underneath is massive support, while the 1.39 area above is massive resistance. We are currently essentially at fair value, so I think this is a pair that you have to be very cautious with because it could go either way. If we do start to take off to the upside, the 1.3625 level could be short-term resistance. On the downside, not only would the 200-day EMA and the 50-day EMA both come into the picture for potential support, but then we could find support at the 1.34 level. In general, this is a very neutral pair and that does make a lot of sense considering that the US dollar is starting to try to turn things around and a lot of traders out there are not necessarily sure what to do with it.
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Rangebound Year?
That's not just the US Dollar against the Canadian dollar, it's against other currencies such as the Euro, the Japanese yen, the Australian dollar, et cetera. So, the Canadian dollar won't be any different. This is a market that we need to see some type of impulsive move in one direction or the other, and then just simply try to follow it to the top or the bottom of the larger overall 800 pip consolidation region. I do believe that given enough time we will continue to see a huge range in this pair, just like we have seen all over the place in the Forex markets, and of course this pair does tend to range anyway. With this being the case, I am fairly ambivalent at the moment, but I do recognize that we are in the massive decision point and it’s worth paying close attention to. Do not forget that the Canadian dollar is heavily levered to the crude oil market as well.
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