The US dollar has initially tried to rally during the course of the trading session on Monday but give back the gains as we reached towards the 50 day EMA. This is an area that has been resistance as of late so it should not be a huge surprise that we have seen this pair form a bit of a shooting star. Furthermore, there are rumors now that the Russians are going to try to continue the production cuts into the month of April, so that could end up being another catalyst for crude oil to continue going higher.
In fact, the US dollar looks somewhat stronger against most currencies across the Forex world, with perhaps the notable exception of the Canadian dollar, so this is certainly something worth paying attention to. My favorite trade is probably going to be shorting EUR/CAD, as it ties in the weakness of the euro with the resilient strength of the Canadian dollar. In the short term though, it does look like we are more than likely going to see this pair drift lower and try to reach towards the 1.24 handle. The 50 day EMA above has offered significant resistance, so breaking above that would not only be a technical breakout, but it would also break out above what had been decent selling pressure during the day.
The one thing that I cannot help but notice across the Forex world during the session is that we simply have nowhere to be. Unfortunately, this may be the case going forward, because the currency markets have lost a lot of the volatility that we found again. At that point, it makes more of a “grind” than anything else. This pair is notoriously capable of grinding, much like the EUR/USD pair, so you are going to have to be a bit patient, because your profits may take a while to get here.
Pay close attention oil though, because of course the Canadian dollar is highly levered to the crude oil market and as a result we will probably see it go higher with that commodity. The action in the oil market suggests that we are going to see hope burns eternal, so it is very possible that we see downward pushing this pair, even though the US dollar looks pretty healthy against most other currencies.
