The USD/CAD has rallied again during the trading session on Wednesday, as we are threatening to break out above the 1.38 level. At this point, the market is likely to continue to show signs of strength, and it looks as if we are going to try to go to the 1.40 level, which is a large, round, psychologically significant figure, and where the market has pushed back previously.
The size of the candlestick for the trading session on Wednesday is relatively strong, but it is more important to pay close attention to the fact that we are still very much in an uptrend. Furthermore, you need to pay attention to the fact that interest rates in the United States continue to climb, and the Canadians have a huge issue on their hands outside of the inflation fight. The housing market in some of the bigger cities in Canada such as Toronto, Vancouver, and even Montréal, are starting to see problems. After all, Canada sidestepped the 2008 destruction of the housing market in the United States, but it looks like the chickens are coming home to roost.
Oil Demand Likely to Drop
- On pullbacks at this point, there’s very likely going to be a lot of support near the 1.35 handle, which is an area that is a large, round, psychologically significant figure, and an area where the 50-Day EMA is starting to approach.
- I do like the idea of buying dips, because quite frankly the US dollar is the only currency you can hold for any significant amount of time.
- Beyond that, you need to look at the crude oil market and understand that it is getting its head handed to it, since the crude oil demand is probably going to drop in a massively slowing global economy.
Most Forex traders use the Canadian dollar is a proxy for the market, so if it falls, so does the value of the Canadian dollar. Ultimately, this is a market that I think continues to see a lot of upward pressure, especially as interest rates in America continue to show signs of strength. Ultimately, if we stay above the 1.35 level, there’s no way you can short this market anytime soon, and I think that’s going to continue to be the case for the foreseeable future.
Ready to trade our Forex trading predictions? Here are some excellent Forex brokers to choose from.