The USD/CAD pair fell during the day on Wednesday, as we continue to struggle to get past the 1.40 level. This isn’t a surprise though, because quite frankly it is a large, round, psychologically significant number, and the fact that it is an area that has in the past been important. With that being the case, it’s not a big surprise and I feel that this is simply an attempt to try to find some type of momentum going forward so that we can finally break out. I think we will, but I think the fact that we are within a day or so of Christmas, that will continue to work against the buyers.
However, I feel that it is only a matter of time before we do find enough momentum to continue going higher, as the US dollar is the favored currency by Forex traders around the world. On top of that, I feel that more than likely the value of oil will continue to work against the Canadian dollar simultaneously. After all, there is simply no demand for crude oil at the moment, and quite frankly as long as we are extracting 2 million next are barrels out of the ground every day, I don’t think it changes.
Buying Dips
I believe that buying dips in this pair is the only thing you can do, and quite frankly this is one of those dips that will provide value. The 1.37 area will most likely be very supportive, so any type of supportive candle between here and there should be a buying opportunity given enough time. I think that eventually we will build up enough momentum to break out, but it may take several attempts. With this in mind, I am buying dips on short-term charts in trying to pick out pieces of profit as I go along. It is not until oil starts to turn things back around and I think this pair will truly break down.
