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Forex pairs in this Article » USD/CAD
By: DailyForex.com

The USD/CAD pair fell during the bulk of the session on Thursday, but as you can see found a bit of support just above the 1.06 handle again. The resulting action formed a hammer, this hammer of course suggests that the consolidation will continue going forward. The top of this consolidation is at the 1.07 handle, which is a place that we’ve seen significant resistance over and over again. A break out above the 1.07 level since this market much higher, probably to the 1.10 level given enough time.

I ultimately believe that the US dollars starting to show strength not on fear, but rather actual strength out of America itself. That being the case, we should continue to see this market go higher and buying pullbacks would be the way I would approach it. We could see a bit of sideways choppiness between now and New Year’s Day, but once January starts back up with its full liquidity, I see no reason for this market not the go higher.

Oil prices

Obviously, oil prices can have an effect on the value the Canadian dollar, but right now I think people were focusing more on demand, and less on the value of the US dollar versus oil. Because of that, I think both the US dollar and the oil markets will continue to go higher over the longer term, at least as far as I can tell. The markets should continue to focus on the United States itself, before eventually giving ground and heading out words the less “stable” markets.

I have always found it a bit of a misnomer to consider Canada a “riskier” market, but as it is a commodity currency, people treat it as such. Ironically, the two economies are so intertwined I’m often amazed at how sideways is market can be, and for how long. However, when it moves, it moves drastically. I think we’re going to see that at the beginning of the year and I is a matter of fact already have some long positions put on. Selling is not a possibility until we get below the 1.04 level, something that we will not see between now and New Year’s Day.

USDCAD Daily 122713

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