- It's easy to see that the market is going to continue to be very noisy but very bullish.
- We have broken above the crucial 50 day EMA after bouncing from the crucial 200 day EMA.
- Furthermore, the 1.36 level has been in the area of significant support, so it's not a huge surprise to see that it has acted as such yet again.
- This is a market that is often choppy and sideways to say the least, and more of the same is exactly what I would anticipate over the longer term.
- This market is continually sideways it seems, with only the occasional momentum trade occurring.
In general, the USD/CAD market is a one that I think continues to be noisy, but that's typical as it's choppy under the best of circumstances. Furthermore, you have to keep in mind that the U.S. dollar is currently in focus by traders around the world as we are trying to sort out what the Federal Reserve is going to do, what that's monetary policy.
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Bank of Canada
At the same time, you have the Bank of Canada, which is loose and probably getting looser. So therefore, it works against the value of the Canadian dollar itself. The size of the candlestick is impressive, and it does suggest that perhaps we are going to continue to see that the market probably has plenty of buyers willing to get involved.
If we can break to the upside than the 1.3750 level is an area that I think a lot of resistance resides. Breaking above that could open up quite a bit of momentum to the upside in general. This is a situation where traders will continue to be cautious but bullish. I think at this point in time, any dip offers value, especially as the Canadian dollar itself is weak. So, pay close attention to that. As far as the oil correlation to this pair is concerned, I think that's probably about dead at this point, as the United States produces more than enough of its own oil.
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