USD/CAD Falls, but Finds Support - 13 November 2014

The USD/CAD pair fell during the course of the session on Wednesday, but found enough support at the 1.13 level to turn things back around and form a little bit of a hammer. Because of that, it looks as if the market is going to see buyers stepping in here, and as a result we believe that the US dollar should continue to strengthen against the Canadian dollar. The Canadian dollar has been beaten up for some time now, and as a result I believe that we essentially are trending to the upside.

I think that the pair is going to head to the 1.15 handle, an area which of course is a large, round, psychologically significant area. I think that the level will attract the market like a magnet, and because of this I am looking to buy dips going forward as the US dollar is without a doubt one of the strongest financial instruments in the world right now.

Oil markets

I believe that the oil markets will continue to work against the value of the Canadian dollar, and as a result this market should continue to find plenty of buyers. I believe that the 1.12 level is also supportive, so even if we break down a little bit from here, there should be plenty of buyers below to get involved. It’s only a matter of time before the buyers step in, so at this point in time there is no way to sell this market. I am currently not selling the US dollar against any currency, let alone a commodity currency which of course is going to be very susceptible to weakness at this moment in time.

Ultimately, this pair should continue to grind even higher and I believe that it is a longer-term buy-and-hold type of situation. I think that the choppiness of this pair will typically put off many traders, but if you are more of a longer-term and relaxed type of trader, this is a pair that can do quite well over the longer term.

USDCAD 111314

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.