The USD/CAD pair has been grinding its way higher over the last several weeks, and I believe this will continue to be the case going forward as we reach towards December. The USD/CAD pair has been in a nice uptrend for a long time, and as a result I don’t think much is going to change. Yes, I recognize that we are struggling in this general vicinity, but it’s only a matter time before we break out.
The 1.35 level above is massively resistive, but once we get above there I feel that this market has the ability to become more of a “buy-and-hold” type of situation. Pullbacks at this point in time will find the 1.30 level below to be massively supportive, but to be honest I would be very surprised if we went back down to that area.
Crude Oil
Looking at the crude oil markets, they all look as if they’re ready to continue drifting lower, and that should work against the value of the Canadian dollar going forward. On top of that, US dollar has been strengthening overall, and with this being the case I think it’s only a matter time before this market breaks out and we could even see the breakout early in December as the Nonfarm Payroll numbers are coming out in America at the same time the Canadian employment situation gets announced. This could be a little bit of a “perfect storm” in determining which way this market moves in the next month.
However, even if we fall from here I have no interest in selling and quite frankly look at it as potential value in the greenback as this market certainly is just far too strong to start shorting. It’s not until we get below the 1.28 level that I start to think about selling, and quite frankly I don’t think that’s going to happen anytime this month.
