US dollar choppy against Canadian dollar again on Monday
The US dollar rallied initially during the trading session on Monday, showing signs of strength before reaching the 1.29 level, an area that has been resistance more than several times lately. Because of this, I think that we continue the overall consolidation, as there is a massive amount of resistance extending to the 1.30 level. If we were to break above the 1.30 level, that could be a very strong sign for the greenback, which is the strongest major currency in the world right now. I think that the Canadian dollar is suffering due to the Bank of Canada stepping away from interest rate hikes, or at the very least pushing them back.
Although crude oil markets have been very strong, this has not helped the Canadian dollar in general, and this tells me that the world is focusing on the Canadian economy, and not necessarily using the currency as a proxy for the crude oil markets for months. Ultimately, if we break down below the 1.28 level, I think there is a massive “floor” in the market near the 1.2750 level, so if we break down below there, it could change the overall attitude of the markets. Until then, I think we continue to consolidate with a generally upward bias, but obviously we have a lot of work to do to finally send this market much higher. Until then, I think buying the dips continues to work, at least on short-term charts.