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USD/CAD Forecast: Gains as Oil Slumps

By Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
  • The US dollar rallied a bit during the course of the trading session on Tuesday and we have launched from the 1.35 level, and it looks like we are trying to recover.
  • This does make a certain amount of sense due to the fact that the 1.35 level of course is a large round psychologically significant figure.
  • It is also an area where we would see a lot of options, barriers being laid out, and a lot of interest via algorithms.

All things being equal, this is a market that I think eventually goes looking to the 200 day EMA, possibly even the 1.3750 level. The Canadian dollar is taking it on the chin a little bit during the trading session due to the fact that crude oil has been hammered.

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China Causing Issues for Canada? Maybe.

Chinese demand or perhaps I should say Chinese lack of demand for crude oil certainly has had its influence on the market. Short-term pullbacks probably continue to see plenty of buyers as well. I think there is a lot of support just below the 1.35 level that extends down to the 1.3450 level. The market, of course, did fall rather precipitously recently. So, I think this is a situation where the market is going to continue to see a lot of choppiness. And if we do see a lot of US dollar strength, then it's likely that this will be one of the first places you need to go looking. Ultimately, this is a situation where market participants continue to see a lot of volatility, but I do think we are trying to find its floor.

USD/CAD Forecast Today 04/09: Gains as Oil Slumps (graph)

If we do find our floor, it is likely that we will see a significant increase in the value of the US dollar against Canadian dollars, as the Canadian economy has been struggling for a while, and the US economy at least can pretend there is a significant amount demand. With this, it makes a bit of sense the USD continues to see momentum.

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Christopher Lewis
About Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
 

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