US dollar pulls back initially against the Canadian dollar, only to turn around and rocket higher
The US dollar has initially drifted lower during the trading session on Friday, reaching down towards the 1.2625 handle. We found enough bullish pressure to turn things around though and reached towards the vital 1.2750 level. This was helped by a softer than expected CPI number coming out of Canada, and this of course is very negative for the currency. This is despite oil markets rallying, and it shows just how fragile the Canadian economy could be. I believe that the rising interest rates in the United States is also dictating that this market will probably try to go higher as well. If we can clear the 1.28 level, then the market will more than likely go looking towards the 1.30 level. Short-term pullback should continue to offer value, unless of course the oil markets spike rapidly.
The 1.30 level above will of course be very resistive, and I think that the market should continue to see sellers in that region. However, if we were to break above that level the market should continue to go much higher. I suspect that the markets continue to be very noisy, which is usual as these two economies are so highly correlated. I suspect that the market is trying to keep up the bullish tendency, but it is going to be very noisy. There is a massive uptrend line underneath, based upon weekly chart. Oil markets are rallying and that of course puts a bit of a downward slant to the market at times.
USD/CAD Video 23.04.18
This article was originally posted on FX Empire
