Forex Marketz Daily Forex News – Fully Markets Update
The USD/CAD pair broke higher during the course of the session on Friday, testing the very top of the descending triangle that we have been bouncing around in. Because of this, it appears the market is trying to break out and if we can get above that level, it’s very likely that the market will continue to head towards the 1.30 level. This area of course is interesting because it’s where the market stopped during the height of the last financial crisis. I believe there is a massive amount of resistance in that area, so I would anticipate that it would take several attempts to break above there.
Oil market still cannot get their own footing, so that of course will not help the Canadian dollar going forward. The Bank of Canada recently cut rates in a surprise move, so that shows that the Canadian dollar should continue to go down in value given enough time. We believe that this market will ultimately break above the 1.30 level, but it will take a bit of time, as it is such a significant level.
Even if we were to break down a bit from here, and that trigger the descending triangle pattern, the truth is that there is far too much in the way of support at the 1.20 handle to be overly concerned about shorting. I believe at that point in time that there would be supportive candles forming down in that area. They can offer a significant amount of value in the US dollar, which of course is the worlds favored currency at the moment. Ultimately, I believe that this pair does continue to go much higher over the longer term, and that this is the beginning of a multi-year uptrend.
Having said that though, if we somehow break down below the 1.18 level, everything changes for me, and then I start shorting. Until then, this is a “long only” type of situation as far as I can see. Either you are buying pullbacks, breakouts, or sitting on the sidelines.
