With the US dollar rallied on Wednesday, we stay within the consolidation that we have been in. I think that the market will continue to see the 1.2750 level underneath as massive support, and perhaps an area that we continue to bounce from in an attempt to break above the 1.30 level. If we can break above that level, the market is likely to continue going much higher, but I think it’s going to take quite a bit of momentum. With the jobs number coming out tomorrow, that might be the reason for the final breakout, even if oil does look reasonably strong.
It looks as if interest rates could continue to climb in America, which of course favors the greenback in the currency markets. I have no interest in shorting this market, least not until we break down below the 1.2750 level, something that doesn’t look very likely to happen in the short term. I believe the dips continue to offer buying opportunities, as we try to build up the necessary inertia to break out. If we can break above the 1.30 level, it’s likely that we then go to the 1.32 handle after that. I anticipate a lot of noise on the way out, but I do think that eventually we will see this market rally, as the US dollar looks to be reasonably healthy this summer, especially against the Canadian dollar as Canada is dealing with its own issues.