US dollar rallies against the Canadian dollar for the week

The US dollar has initially pulled back to the week only to find support at the 1.2750 level. We have since reached towards the top of the shooting star, and I think that if we were to break above that shooting star, it would be a sign that we could go much higher. Ultimately, I think that the market breaking above the 1.30 level should send this market looking towards 1.31 handle where we had made the most recent high. A break above that should send the market to the 1.35 level.

Ultimately, if we did turn around and break down below the 1.2750 level, the market should unwind to the 1.25 level, perhaps even a bit lower to test the uptrend line. Oil typically has a lot of influence on the market, so pay attention to what’s going on there. However, recently we have seen a bit of a divergence from that, as I believe interest rates are much more interesting to people than commodities.

The markets continue to be very noisy and choppy, therefore I think that the short-term charts are probably the best way to play this market, but once we do get a break out to the upside, that would be a longer-term signal the start going long. Otherwise, I think that we will go to test the uptrend line underneath. I think that the longer-term trader will probably find this market a bit difficult though, as there are several different levels in both support and resistance right around this current area. Ultimately, keep your position size small.

USD/CAD Video 21.05.18

This article was originally posted on FX Empire

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