The US dollar continues to rally against the Canadian dollar during the trading session on Wednesday as we continue to see more of an upward grind overall.
After all, we are well above the 200-day EMA right now.
And of course, there are a lot of concerns in the Middle East as far as whether or not peace can break out.
If the US dollar continues to strengthen against the Canadian dollar, that would make quite a bit of sense considering it is considered to be a safety currency, and of course, the Canadian dollar is so highly levered to more of a risk appetite driven trade.
The oil markets rallying or selling off won't have as much of a significant influence here due to the fact that the United States produces so many barrels per day. With this, the Canadian dollar acts a little bit different here, and that's fine, but you need to understand that the interest rate differential will continue to favor the US dollar, and that's one of the biggest things to pay attention to. The Canadian economy is heavily dependent on the US economy, so if we see things fall apart in the United States, ironically, that could send this pair higher as well.
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Short-term pullbacks I think are buying opportunities with the 200-day EMA offering support, and the 1.3850 level above offering resistance. I like the idea of buying dips. I think we try to get to the 1.3950 level over the longer term.
I don't have any interest in shorting this pair, but if we start to see the US dollar fall apart against all the other currencies in the G10, then maybe I would have to consider it.
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