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US dollar rallies against Canadian dollar during Friday session

By:
Christopher Lewis
Updated: May 19, 2018, 07:18 UTC

The US dollar has rallied significantly against the Canadian dollar, reaching towards the 1.29 level. This is an area that has been a bit resistive in the past, so it’s no surprise that we struggled to break above it. However, there is also a massive amount of support underneath.

USD/CAD daily chart, May 21, 2018

The US dollar has rallied significantly during the trading session on Friday, reaching towards the 1.29 level before struggling. It looks likely that we will continue to see this market jump around, because the factors that are moving this market are a bit contradictory. The oil markets have been rallying as of late, which of course is very bullish for the Canadian dollar, but I also recognize that the interest rates rising in the United States will continue to put bullish pressure in this pair. I think that we will get a lot of “push pull” action over the summer, but ultimately I do think that the buyers could have their way. That’s not to say that we won’t break down, but I also see there is a significant amount of support in the form of an upward trend line.

Volatile trading on short-term charts should continue to be the case, but it’s obvious to me that the 1.2750 level is certainly attracting a lot of attention from the buyers, and I think that the 1.30 level has been just as stringent. It’s not rare for this pair to go back and forth for long periods of time, and the summer months can typically be a bit of a yawner when it comes to this pair. Because of this, I will transition to a range bound system, perhaps using something along the lines of the stochastic oscillator to help with the overbought and oversold conditions.

USD/CAD Video 21.05.18

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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