The US dollar has rallied significantly against the Canadian dollar on Tuesday, as we press the resistance level at the 1.2625 level. The market looks likely to find buyers underneath, as we have seen a massive search higher over the last couple of days, and ultimately, I think that the market will continue to see buyers coming back in, and these pullbacks that will be coming should be buying opportunities. Ultimately, I think that the market will continue to find plenty of reasons to go higher, not the least of which could be the oil market.
The 1.2750 level has been noisy in the past as well, so I think that the longer-term attitude should remain bullish, but oil will have it say as it typically does. I believe that oil has seen the highs for the year, so I think that will continue a long and grinding move higher in this pair. Beyond that, the Canadian economy has some issues, not the least of which is the housing bubble. Beyond that, the most recent employment numbers have been a bit soft in Canada, so that of course doesn’t help the idea of a stronger Looney either.
I believe that the 1.25 level now is the “floor” in the pair, and I believe that between here and there, we should have plenty of buyers to pick up value when it appears. In a sense, when you look at the last several trading sessions, we have made a round-trip, and that typically means that the sellers have just lost the argument. A little bit of patience can go a long way when holding onto this move.
Written by FX Empire