The Canadian dollar rallied during the trading session on Friday into the 200 day EMA but Monday wasn’t quite as impressive. As the market struggles at this large and widely followed trend indicator, one has to ask whether or not the Canadian dollar can continue to go higher. At this point, it doesn’t look very likely to be easy, not only because of the 200 day EMA but also because of the ¥82.50 level which has caused so much resistance. The market down from there back in July, so obviously there is going to be a lot of “market memory” in the vicinity.
On a break down below the bottom of the candle stick for the Monday session it’s likely that the Canadian dollar will go looking towards the ¥80 level, although there is a lot of noise between here and there. Pay attention to crude oil, because it will most certainly have some influence as well. To the upside, break above the ¥83 level opens up the door for a longer-term “buy-and-hold” type of strategy, perhaps sending this market as high as ¥85 eventually. Keep in mind though, this pair is somewhat risk sensitive, and there’s plenty of risk concerns out there right now that could come into play. Ultimately, this is a market that looks as if it is in somewhat of a range, at least for the short term due to the fact that there is so much in the way of massive resistance. Obviously, a break above that level would attract a lot of attention.
To the downside, if this market breaks down below the ¥79.50 level, it is likely to open up the floodgates down to the December 2019 for those of ¥76.50. That would take a significant turnaround though, and obviously a lot of fear. The most likely outcome is short term consolidation in this general vicinity.
On a break down below the bottom of the candle stick for the Monday session it’s likely that the Canadian dollar will go looking towards the ¥80 level, although there is a lot of noise between here and there. Pay attention to crude oil, because it will most certainly have some influence as well. To the upside, break above the ¥83 level opens up the door for a longer-term “buy-and-hold” type of strategy, perhaps sending this market as high as ¥85 eventually. Keep in mind though, this pair is somewhat risk sensitive, and there’s plenty of risk concerns out there right now that could come into play. Ultimately, this is a market that looks as if it is in somewhat of a range, at least for the short term due to the fact that there is so much in the way of massive resistance. Obviously, a break above that level would attract a lot of attention.
To the downside, if this market breaks down below the ¥79.50 level, it is likely to open up the floodgates down to the December 2019 for those of ¥76.50. That would take a significant turnaround though, and obviously a lot of fear. The most likely outcome is short term consolidation in this general vicinity.