(MENAFN- Daily Forex)

• The Canadian dollar initially pulled back a bit during the early hours on Wednesday but has turned around to show signs of life as the 200-day EMA has offered a significant amount of support.
• At this point, if we can break above the 0.64 level and maybe just a little higher than that, the market is likely to continue to go much higher.
• In that scenario, I think you see the Swiss franc get hammered by quite a few other currencies as well.

I Don't Like the Loonie, But...

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Now, I'm not a huge fan of the Canadian dollar right now, but I am the first to suggest that perhaps the Swiss franc should be sold into. After all, the Swiss National Bank has recently cut its interest rates by 50 basis points in a bit of a panic move, and that has caught the attention of a lot of traders.

Ultimately, I think you've got a scenario where people will continue to look at this through risk appetite. I do think that risk appetite certainly would favor the Canadian dollar in this scenario. However, I also recognize that we could pull back from here. And if we do, then it ends up being a test of the 200 day EMA that I expect initially followed by the 50 day EMA.

After that, the market has been rather noisy over the last couple of weeks as we have raced higher, but I also recognize that the interest rate differential still favors Canada despite the fact that there are a lot of problems in Canada. If we do break down, then I think we're just going to end up staying in this overall consolidation area and we may just not be ready to go higher. Eventually though, I would not be surprised to see this market reach towards the 0.66 level.

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