The US dollar has found buyers on Wednesday against the Loonie, as the larger range looks to be holding.
USDCAD
The US dollar has found itself to be a bit noisy during trading on Wednesday as we are trying to find some type of bottom against the Canadian dollar. It’s worth noting that the 1.3550 level is offering significant support still and the fact that we have formed 3 hammers in a row tells me that there is clearly some type of support here willing to turn things around.
Whether or not we can break out to the upside remains a completely different question, but when I look at the chart, it makes quite a bit of sense that we might end up being somewhat sideways from a longer-term perspective. After all, once we get to the 1.37 level you see a lot of resistance all the way to at least the 1.3750 level.
Interest rates in the United States have risen during the trading session and of course oil at least has at the moment calmed down a bit and therefore you don’t have that oil premium for the Loonie at the moment.
Technical Analysis Driven Pair
That being said, it’s not necessarily the US dollar you’d be trading the Canadian dollar against to play oil anyway, but at this juncture, I think what you’re seeing is a very technically driven currency pair that is sitting in an area that of course is highly defined from both support and resistance.
If we can break above the 1.3750 level then I think the US dollar truly rallies, but in the short term what I’m looking for is some type of bounce. I think this is a short-term trade, I think plenty of headlines out there continue to cause chaos and therefore you have to be somewhat cautious, but the more risk off attitude you see out there, the more likely you are to see the US dollar.