- The US dollar rallied against the Canadian dollar on Tuesday as we are now trying to get above the 50-day EMA.
The 50-day EMA is a major indicator that a lot of people will be watching most of the time and therefore it is not a huge surprise to see there's a little bit of pushback in that area, but whether or not that remains the case we'll have to wait and see.
I do think that the 50-day EMA being broken, if it can be sustained, will be a major trading signal that perhaps we are ready to go higher. Ultimately, the market is looking very much like a market that is trying to figure out whether or not we can continue the momentum to the upside.
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Jobs Market Sentiment and Resistance Levels
With this, I believe that you have a scenario where it's probably only a matter of time before traders will start to focus on the jobs market and the jobs market will get the jobs number on Friday and therefore I believe it is probably only a matter of time before we have to make a bigger move.
If the USD/CAD pair do fall from here then it's possible that we have a potential move back towards the 1.36 level, but I think that probably would take interest rates in America collapsing and of course traders starting to feel comfortable with the idea of taking on more risk.
Crude Oil is helping the Canadian dollar in general, but it won't be found in this pair because of course the United States is a major producer. Ultimately, I think we've got some questions asked over the next couple of days. I'll be watching the 1.3750 level because if we can get above there that would be a very positive turn in events.
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