- The US dollar has been back and forth during the trading session on Wednesday against the Canadian dollar as we continue to see overall upward pressure, but at the end of the day, we are still very noisy in this pair.
- After all, the pair is typically choppy to begin with, as there is so much in the way of cross-border transactions that most of the movement in the USD/CAD pair anymore has to do with business dealings and a lot less to do with speculation.
Breakout
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Keep in mind that we just broke out above the 1.40 level, and this is an area that is a major issue for the Canadian dollar, and I also recognize that the Canadian dollar has been very soft against most currencies. Furthermore, not only have we broken above that large, round, psychologically significant figure, but we also are starting to see the 50 Day EMA break above the 200 Day EMA indicator, kicking off the so-called “golden cross.” The “golden cross” is a very bullish sign that a lot of people pay close attention to from a longer-term “buy-and-hold standpoint. All things being equal, this is a market that I think remains noisy, but I do think it remains bullish in general.
It is worth noting that the candlestick for the trading session on Tuesday was a shooting star, and we are struggling to break above there, but I also think that this pullback will just end up being a buying opportunity for the US dollar as it continues to strengthen against multiple other currencies, not just the Canadian dollar. The overall trajectory of this pair should send the US dollar to the 1.42 level eventually, but again, this is a very choppy pair under the best of circumstances, so I don’t necessarily think we get there very quickly, unless we get some type of economic announcements that throws chaos into this market. I remain bullish of the US dollar overall, and most certainly against the Canadian dollar.
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