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MENAFN- Daily Forex)
It's obvious that we have broken out to the upside as far as the greenback is concerned. At this point in time, I think short-term pullbacks will be buying opportunities, and I would pay special attention to the 1.36 level. This is an area that features the 50 Day EMA and the 200 Day EMA, as well as previous resistance it should now have quite a bit of“market memory” in that general vicinity.
We've just finished making a massive“W pattern”, which of course is something that a lot of people will be paying attention to as the double bottom at the 1.3450 level will have people looking to this as a potential buying opportunity. As things stand right now, I think you've got a situation where the 1.3750 level will be a resistance barrier. If we can break above there, then the market could truly start to take off to the upside and would probably be accompanied by the US dollar strengthening around the world.
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It's worth noting though crude oil markets plunged during the trading session on Tuesday, losing over 4%. The market seems to be focus more on fears of a lack of demand over the turbulence that we have seen in the Middle East. While this commodity doesn't directly affect the USD/CAD currency pair , it has a major influence on the Canadian dollar overall. Keep in mind, the United States produces more than enough oil to negate the crude oil trade in this particular currency pair, but if the Canadian dollar starts getting sold off around the world, it does have an influence here.
All things being equal, this is a market that bounced from the 1.3450 level, an area that had previously been support, and of course is the bottom of the overall consolidation region. The Moving Average Convergence Divergence indicator is starting to rise a bit, so it does suggest that perhaps we will have an attempt to rally from here and perhaps reach to the upside.
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