- The US dollar has fallen again against the Canadian dollar during the trading session on Monday as the overextended nature of the sell off continues.
- That being said, it’ll be interesting to see how this plays out because the oil markets obviously are in focus now and while Canada doesn’t have as much of an influence over oil prices in the currency markets against the greenback as it once did, it is still a thing.
- Short term rallies are going to be a selling opportunity at least until we can break above the 1.3750 level or we get some type of major issue.
When we get a “risk off” type of attitude. After all, the US dollar is considered to be a safety currency. And you have to look at it through that prism in this pair.
Canada’s Economy is So-So.
The Canadian economy is wishy washy at best. So, keep in mind that you still have to see Canada pick up its momentum a bit. The 1.3425 region is an area that I think we could see a lot of support. If we break down below there, the market could then very well break down. A breakdown below that level probably kicks off a longer term sell and hold type of situation, but as things stand right now, you are paying swap to do so.
As a longer term swing trader, I’m not a huge fan of this. If we were to turn around and take out the 1.38 level to the upside, then I might consider buying, but right now this is more of a fade the rally short term type of market from what I see, which isn’t overly surprising considering that the pair is choppy. Most of the time that’s its actual default modus operandi.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
