The US dollar has gone sideways against the Canadian dollar during training on Thursday. The market is hanging about the 1.2850 level, as we tried to break out on Wednesday but failed. I think that the market could pull back a little bit from here, but I believe that the 1.2750 level should offer significant support. That level should hold up, and if it does I believe that the market will then go to the 1.30 level above, which is a large, round, psychologically significant figure as well as a structurally resistive area. I think that a break above there will take a lot of effort, so therefore think it will take several attempts.
If we were to break down below the 1.2750 level, the market would probably unwind down to the 1.2650 level, perhaps even lower than that. Ultimately, the market seems to have a significant amount of support at several levels underneath, and I think that we are trying to retake the uptrend from earlier in the year. Ultimately, the market should be able to break above the 1.30 level as interest rate differential will continue to favor the US dollar. The interest rates in America are rising, while inflation numbers and Canada have been a bit of a disappointment. I believe buying the dips will continue to be most traders approach this market.