US dollar recovers nicely against Canadian dollar for the weekThe US dollar initially fell during the week, reaching down to the vital 1.2750 level before bouncing significantly. By the time the week closed out, we did of forming a very strong looking candle, and it appears that we are threatening the 1.30 level being left in the rearview mirror yet again.
The US dollar has initially falling during the week, reaching towards the 1.2750 level before finding a lot of support against the Loonie. By doing so, we ended up forming a bit of a hammer like candle, and I think it shows that we are trying to build up the necessary momentum to break above the 1.30 level again, an area that has been important more than once. If we can break above the 1.31 level, the market should continue to go even higher, perhaps reaching towards 1.35 level next which is what I think we will see this summer. We continue to make “higher lows” and have recently tested the major uptrend line over the last year and have found it to be useful.
Oil markets have gotten ahead of themselves, and I also believe that even if they do rally, the most important thing to pay attention to will be the interest rate markets which favor the US dollar in general. The Canadian economy continues to show poor economic numbers, and that of course works against interest rate expectations coming out of Ottawa. Longer-term, I think we will not only reach the 1.35 level, but I think we will make a fresh, new high again. The US dollar certainly seems to be stronger than most currencies around the world, while the Canadian dollar is being held up by oil only. If that market turns around and falls apart, this market will shoot much higher.