The US dollar has fallen a bit against the Canadian dollar during the trading session on Friday, as there has been a little bit of a relief rally when it comes to risk appetite around the world. The Canadian dollar of course is considered to be a “risky currency”, but it is not getting much help in the form of the crude oil markets. Crude oil markets fell rather drastically over the last 48 hours, forming a very ugly candlesticks. However, the Canadian dollar has gotten a little bit of a boost perhaps due to the fact that people are simply trying to express a way to show that there is quite a bit of relief after the Ukrainian war does not seem to be expanding.
That being said, if the crude oil market suddenly spike, there is a possibility that this pair continues to go lower. It would obviously have to deal with the 50 day EMA, as well as the 200 day EMA underneath that. Support is also found that the 1.26 level, so I think sooner or later we would see buyers jumping back into this pair on any dip.
When you look at this chart, the market is likely to go looking towards the 1.29 level, perhaps even the 1.30 level after that. It is worth noting that there is a lot of support underneath that should continue to show signs of life, and therefore I think it makes quite a bit of sense that if we break above the 1.30 level, it is likely that we would go much higher. If we do break above the 1.30 level, then I am not only willing to buy this market for a bigger move, but I am willing to hold on to it. This would make a lot of sense if we do get some type of major “risk off” type of situation where traders fled back into the greenback.
I think the only thing you can count on in this pair right now is going to be a lot of choppy behavior and back-and-forth movements as the 50 day EMA is likely to continue offering support, and it is curling higher. In general, this is a market that I think favors the upside, but that does not mean that is going to be easy to get there.
