US dollar plunged against the Canadian dollar again on Monday as we continue to see traders betting on the Federal Reserve being dovish, and oil perks up slightly.
USDCAD
US dollar plunged against the Canadian dollar during trading on Monday as we have seen US dollar selling overall. This being the case, I think it makes a certain amount of sense that the Canadian dollar would pick up as traders are starting to get an idea as to whether the longer-term selling of the US dollar can continue. Quite frankly, there is no real news out there other than China urges banks to curb US Treasury exposure on market risk, but I don't know who would actually listen to that and make a decision. Oil is doing fairly well as of late, so this could be a minor factor as well.
With that being the case, you have to assume that this is just a continuation of what we have been seeing over the last month or two. But the question now will be whether the 1.35 level holds. The 1.35 level is a large, round, psychologically significant figure that matters when going back quite some distance.
Technical Support Levels
If we were to break down below the 1.34 level, then it could open up a move down to 1.32, which extends all the way back to September of 2022. This is a market that typically is rather choppy and, as gloomy as it looks at the moment, we are still very much in an uptrend from the bottom at the month of June 2021.
So, I don't know that it's quite time to panic. This is a pair that does tend to go back and forth quite a bit, offering short-term trading environment type of setups, and we may be looking at that here. We'll have to see how things play out at 1.35. If we bounce nicely, it could be a nice short-term buying opportunity. If we bust through there, then keep an eye on 1.34.
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