The US dollar rose on Monday against the Canadian dollar but has since seen a bit of a pullback. The range continues as far as I can see.
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The US dollar rose against the Canadian dollar early during the trading session on Monday but continues to see a significant amount of resistance near the 1.37 level. The 1.37 level of course is a large round psychologically significant figure and an area that had offered resistance all the way to the 1.3750 level.
Falling from here would make a certain amount of sense as we have seen quite a bit of hesitancy to get above it and with a 50-day EMA sitting right here, that also adds yet another reason for significant resistance. If we fall from here, the 1.3550 level is the beginning of significant support that extends down to the 1.35 handle.
Watching the 200-day EMA and Oil Dynamics
Breaking above the 1.3750 level then puts the 200-day EMA in focus and I think a lot of people would be watching that very closely. Anything above there means that the US dollar is ripping higher against the Canadian dollar and probably everything else.
Keep in mind that the Canadian dollar is highly sensitive to oil pricing which of course is being thrown around by the headlines coming out of the Middle East and it appears that the Americans and the Iranians can't agree on much and if that's going to continue to be the case, it could give a boost for oil.
Oil of course is a major driver for Canadian dollar strength although against the US dollar it's a bit more muted as the United States produces almost 14 million barrels of crude a day. Nonetheless, it drives up demand. Ultimately, I think we are just going to stay in the same range we have been in for the last 3 weeks.