US dollar falls against Canadian dollar during Wednesday session
The US dollar has fallen during the trading session on Wednesday, breaking through the 1.26 level and aiming towards the 1.25 level based upon oil market strengthening, and the Chinese looking to calm tensions between Beijing and Washington DC. Because of this, it suggests that people will continue to sell the US dollar in a bid to pick up at risk. This of course helps this pair, especially considering that the crude oil markets have acted so positively to this new turn. This of course suggests that there could be continued demand for oil, and that helps with pricing obviously. As oil rises, the Canadian dollar rises as well.
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At this point, it looks like the market will sell rallies given half a chance, and I believe that the 1.25 level will be a major target. I also believe that it will be major support, so I don’t expect it to slice through that level very easily. I think that this market can’t be bought, at least not right now, but I will be watching for a longer-term signal near the 1.25 level as it would be a perfect place to see some type of bounce. If we break down below there, then the market will probably go looking towards the 1.23 level, but I don’t expect to see that quite yet. It looks as if currency traders are willing to overlook the housing bubble in the Greater Toronto Area, which could cause a serious problem in Canada, so at least at this moment that is in the background.