The US dollar broke higher during the trading session on Tuesday, clearing several technical barriers that I have been watching lately. We had formed a couple of shooting stars right at the crucial 200 day EMA. The fact that we have broken above there and ended up closing above the 200 day EMA and perhaps even more importantly the top of the candle stick, suggests that we have further to go when it comes to the US dollar strength against the Loonie.
At this point, the 50 day EMA is starting to curb to the upside and is found at the bottom of the candle stick for the day. It also coincides pretty close to the 1.32 handle, and therefore it’s likely that we will continue to go to the upside. At this point, it’s very likely that we are going to go looking towards 1.34 handle as it is a major resistance barrier due to the selloff that we had seen from there. Beyond that, the 1.30 level has offered quite a bit of support, and it looks likely that the buyers came back in due to the large, round, psychologically significant figure, and then of course there was a potential uptrend line that has held there as well.
Adding more fuel to the fire is the fact that the crude oil markets have been falling, which typically works against the Canadian dollar. This is because Canada is such a huge exporter of crude oil and is typically used as a proxy for currency traders to take advantage of moves in petroleum. All things being equal, it’s very likely that short-term pullbacks will be buying opportunities, at least as long as we can stay above the 50 day EMA which looks very likely to swing higher and perhaps cross above the 200 day EMA again.
At this point, the 50 day EMA is starting to curb to the upside and is found at the bottom of the candle stick for the day. It also coincides pretty close to the 1.32 handle, and therefore it’s likely that we will continue to go to the upside. At this point, it’s very likely that we are going to go looking towards 1.34 handle as it is a major resistance barrier due to the selloff that we had seen from there. Beyond that, the 1.30 level has offered quite a bit of support, and it looks likely that the buyers came back in due to the large, round, psychologically significant figure, and then of course there was a potential uptrend line that has held there as well.
Adding more fuel to the fire is the fact that the crude oil markets have been falling, which typically works against the Canadian dollar. This is because Canada is such a huge exporter of crude oil and is typically used as a proxy for currency traders to take advantage of moves in petroleum. All things being equal, it’s very likely that short-term pullbacks will be buying opportunities, at least as long as we can stay above the 50 day EMA which looks very likely to swing higher and perhaps cross above the 200 day EMA again.