US dollar rallies against Canadian dollar on Thursday

The US dollar has rallied a bit during the trading session on Thursday, slamming into the 1.29 region. This is an area that is reasonably significant resistance, and I think that it will take a lot of effort and momentum to finally break above the 1.30 level. If we do, that unleashes this market to go much higher, and I do think that happens eventually. However, there is a headwind of stronger oil pricing, which of course favors the Canadian dollar. At this point, it’s only a matter of time from what I can see.

However, there is always the alternate scenario. In this case, that would be a break down below the 1.2750 level, which has been massive support recently. I think that the market will probably break down significantly if that happens, because the most recent pullback has not made its way down to the bottom of the longer-term consolidation. When we fail to reach towards the bottom of consolidation, that typically means we are going to break out. That doesn’t mean it’s good to be easy, and quite frankly I think it will be very choppy on the way up. If you’re a longer-term trader, you can certainly write out the volatility, but if you are not you may be better off waiting for a move above the 1.30 level, or perhaps some type of pullback to pick up a bit of value in the greenback.

USD/CAD Video 25.05.18