US dollar falls slightly against Canadian dollar to open the week

The US dollar has fallen slightly against the Canadian dollar during the session on Monday, reaching down towards the 50 simple moving average on the hourly chart. This is a market that has recently seen and impulsive move higher and pulling back against it is a bit of surprise, perhaps showing that the market is ready to enter consolidation more than anything else. · FX Empire

Christopher Lewis

Updated Mon, May 21, 2018, 9:56 PM

The US dollar has fallen a bit during the trading session on Monday, reaching towards the 50 simple moving average on the hourly chart. The impulsive candle from Friday has been retraced about halfway, but when I look at the hourly chart I suspect that we may be forming a consolidation area that has the 1.2750 level as the bottom, while the 1.29 level might be the top. I would look to the stochastic oscillator as a secondary indicator, perhaps offering the ability to trade back and forth for the foreseeable future.

It’s possible that the pair enters consolidation for most of the summer, because quite frankly with the higher rates in the United States conflicting with the higher oil pricing, it’s possible there will be a lot of confusion. Keep this in mind, take advantage of what the market gives you, roughly a 150-pip range. Until we break out of this range, I don’t see any need to fight this market, it looks as if it is offering a very nice opportunity for those who are patient enough to take advantage of it. This pair can be kind of quiet during the summer months, and therefore it’s likely that the market will favor this type of sideways action. Obviously, tensions in the Middle East favor the Canadian dollar with higher petroleum prices, while the interest rate situation in America favors the greenback.