- Now that we have cleared this barrier, it does make a certain amount of sense that the market might go looking to the $1.3550$ level, an area that had been a triple bottom.
- The US dollar has broken down below a significant support level in the market against the Canadian dollar.
- The $1.3750$ level is an area that has offered support for the last week or so, but it looks like the US dollar is crumbling overall, and in this market, we are starting to see a little bit of acceleration to the downside.
Now that we have cleared this barrier, it does make a certain amount of sense that the market might go looking to the $1.3550$ level, an area that had been a triple bottom. Short-term rallies, I think, open up the possibility of selling opportunities on signs of exhaustion.
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USD Weak Against Multiple Currencies
But if we were to break above the $1.38 level, then we may have a scenario where we go higher, perhaps reaching the $1.40 level. That being said, we would have to see the US dollar strengthen against multiple other currencies, not just the Canadian dollar.
The Canadian dollar has had a little bit of a boost from the crude oil market, but that doesn't affect this market the way it does other Canadian dollar currency pairs, mainly because the United States is now producing 13.5 million barrels of oil a day, but it doesn't hurt either. Looking at this chart, this just looks like everybody else against the US dollar as the greenback continues to suffer. Nonetheless, I do think that the $1.3550$ level will be a lot harder to break down through, but as we head into the holidays, it's a simple matter of a lack of liquidity that could cause quite a bit of chaos.
This is a market that I still think is trying to find some type of range, but we are all over the place here, and it now looks as if people are starting to trade this based on the steady hand of Ottawa and the possibility of the Central Bank in America, the Federal Reserve, having to cut rates a couple of more times.
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