- My suspicion is we will grind higher, but the speed of it will test your patience in this pair.
USDCAD
US dollar has been all over the place during the trading session here on Friday as we tested the 1.3750 level. I think a lot of people will be looking to determine whether or not the markets will continue to go higher or if we are going to continue to see a lot of noise in this area.
The market is more likely than not going to remain very volatile and very choppy, but that is typical for this pair, as there is a lot of necessity to this pair as well, because of the amount of trade. I am looking at the 1.38 level. If we can clear that, then I think the dollar probably rallies about 200 pips, maybe even 300 pips, because it would show a significant push above a short-term barrier.
Market Outlook and Volatility
If we cannot, then I think we are going to find our next consolidation area. As things stand right now, the major floor in the market is the 1.3550 level, which is an area that formed a bit of a triple bottom over the summer. Anything below that would be a bit surprising.
My suspicion is we will grind higher, but it is going to be a painfully slow grind. That is typical for this pair. As a result, I think you continue to collect swaps at the end of every day, although just barely, and it depends on your broker. All in all, I do think that this is a market that does lift a little bit. Crude oil markets are soft, but that does not necessarily influence this pair as much as it once did, as the United States is now pumping out 13.5 million barrels of oil a day. With this, I am bullish longer-term, but I am waiting for that 1.38 trigger to really get excited.
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