The US dollar has dropped slightly against the Loonie on Friday, as we see a lot of noise, due to interest rates rising in the USA, and the oil markets rising simultaneously.
USD/CAD
The US dollar has dropped slightly against the Canadian dollar during the trading session on Friday as we continue to see a lot of noisy behavior and ultimately, I think you have to watch this very closely as we are at the top of a significant range.
The 1.3750 level is a massive barrier that I think would take quite a bit of work to break above, but if and when we do, that could open up a move to the 200-day EMA rather quickly at the 1.38 level and then the 1.39 level after that.
Ultimately this is the market that I think is trying to do everything it can to break to the upside and that does make a certain amount of sense as rates around the world continue to climb but more importantly it's the United States that's seeing explosive growth.
Economic Outlook and Oil Influence
The Canadian dollar of course is moved by crude oil, but I also recognize that this pair is going to be a little bit different. It makes a little bit of a difference here due to the fact that it provides general Canadian dollar strength when oil is stronger.
But the United States produces 14 million barrels or almost 14 million barrels a day, so the crude oil market itself doesn't influence the dollar negatively like it used to. In other words, this is an economic outlook play and perhaps safety play as well.
We are still struggling to break out to the upside, but I think ultimately the writing's on the wall. We'll just have to be patient and wait to see how this plays out. A break above that crucial 1.3750 level gets me.