Potential signal
I am a buyer above 1.4050 with a stop at 1.3675 with a target of 1.41 above.
The US dollar has rallied again against the Canadian dollar on Thursday, as we continue to see a lot of situations favoring the US dollar around the world right now, not the least of which is the uncertainty that we see everywhere. Furthermore, crude oil is going to continue to be a major factor here, and it looks like oil is starting to drift a little bit lower in general.
That being said, I think ultimately this is a market that is also focusing well past oil and probably more to the demand for US dollars around the world. This has been a relentless move to the upside, and now we are entering an area that will be resistant all the way to the 1.41 level.
While I am still bullish on the US dollar, I recognize that this is an area where I think a lot of people will be watching whether or not the US dollar can power through. I think it's a little bit difficult at the moment due to the fact that a little bit of a pullback might be necessary in order to entice the value hunters.
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Technical Support Levels and Economic Data
All things being equal, this is a market that, over the longer term, probably sees support near the 1.39 level and then again at the 1.38 level.
The Canadian dollar is hampered by weaker Canadian data as of late, and it is worth noting that during the Thursday session, the market has been informed of the PPI numbers being hotter than anticipated in the United States. So, with that, I think you continue to find dips a bit of a value.
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