The US dollar has rallied significantly during the trading session on Friday, reaching towards the 1.29 level before struggling. It looks likely that we will continue to see this market jump around, because the factors that are moving this market are a bit contradictory. The oil markets have been rallying as of late, which of course is very bullish for the Canadian dollar, but I also recognize that the interest rates rising in the United States will continue to put bullish pressure in this pair. I think that we will get a lot of “push pull” action over the summer, but ultimately I do think that the buyers could have their way. That’s not to say that we won’t break down, but I also see there is a significant amount of support in the form of an upward trend line.

Volatile trading on short-term charts should continue to be the case, but it’s obvious to me that the 1.2750 level is certainly attracting a lot of attention from the buyers, and I think that the 1.30 level has been just as stringent. It’s not rare for this pair to go back and forth for long periods of time, and the summer months can typically be a bit of a yawner when it comes to this pair. Because of this, I will transition to a range bound system, perhaps using something along the lines of the stochastic oscillator to help with the overbought and oversold conditions.

USD/CAD Video 21.05.18

This article was originally posted on FX Empire

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