The US dollar continues to chop back and forth against the Canadian dollar on Thursday, as we wait for the next momentum move.
USD/CAD
The US dollar has gone back and forth during the trading session here on Thursday as we are hanging around the crucial 1.42 level. The 1.42 level has been important more than once, and I think you need to understand that we are simply trying to figure out what we are going to do next.
I think ultimately this is a pair that is going to continue to see a little bit of support underneath, but if we were to break down below the 1.4150 level, then we could see this market drop all the way down to the 1.40 level. The 1.40 level is an area that has been important previously and, of course, features the 50-day EMA as well, so with that being said, I think we have a scenario where even if we do break down, it's likely that we find buyers.
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Analyzing the Macro Drivers and Crude Oil Dynamics
If we turn around and break above the 1.4250 level, then it opens up the possibility of a move to the 1.45 level. Keep in mind that the Canadian economy is starting to slip a bit, so I think you have to look at this through the prism of the US dollar being strong because of perceived interest rate hikes happening going forward, and the Canadian economy just struggling a bit.
Oil, of course, has not helped Canada, but it typically doesn't have as much of an influence in this pair as the United States produces almost 14 million barrels of oil a day these days. With this, I think we're flagging. We're going to try to break to the upside, but even if we don't, I'm willing to buy dips in this market going forward.
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