- Taking a look at the US dollar Canadian dollar pair you can see, the US dollar has turned around to show signs of strength during the trading session here on Tuesday after we did initially struggle a bit.
- I think things could be interesting here because tensions in the Middle East seem to be building not dropping and that could very well have a major influence on this pair.
- The US dollar is considered safety currency but at the same time the Canadian dollar will be helped a bit by crude oil.
If it ends up spiking so with this I think you have to look at this through the prism of a market where we may be trying to find a bottom, at least the short term. I think the upside is probably somewhat limited. Unless, of course, we break above the 1.3750 level, then it’s possible that you could see a further extended gain.
On a Move Lower
If we drop from here, the 1.3425 level is an area where I think we could see a certain amount of support. Anything below there, then it opens up the trapdoor. Right now, though, I think we are going to see a short term bounce. And again, that makes a certain amount of sense with everybody being nervous, but whether or not we can change the overall trend is a completely different world.
The market has been overextended to the downside anyways. So, we might at least at this point time, just be looking for a reason to start rallying. Ultimately, a market bouncing from here is possible, but it is also possible that it will be a very messy affair at this point in time.
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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.
