- The US dollar has rallied a bit during the early part of the session on Monday, as we are breaking above the 1.40 level. The market has been very important. All things being equal, we had recently been consolidating between the 1.37 level and the 1.39 level but broke out of there, we tested 1.39 for support and we have continued to go higher.
- The 1.40 level is likely to be an area where I think we now might see a bit of market memory and perhaps possibly a little bit of a floor we’ll just have to see the 50 day EMA is starting to get ready to cross above the 200 day EMA kicking off the so-called golden cross. And that of course is very bullish for longer term traders. So that’ll be interesting to see how that plays out. I still think that the dollar is eventually going to find its way to the 1.4250 level and the interest rate differential means that you get paid at the end of every day. So, keep that in mind as well.
Over the Long Term I am Still Bullish USD/CAD
Over the longer term, I think this market is one where you continue to buy dips in as long as we can stay above somewhere right around the 200 day EMA. Shorting is all that possible. And of course, Canada has a whole host of its own problems with the United States and its own economy in general. If the US economy does slowdown that only sends this pair higher. So, all things being equal and the fact that the US dollar is strengthening against other currencies, I’m still bullish but recognize sometimes this is a choppy and noisy currency pair. Buying dips should continue to be effective.
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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.
