I Don’t Like the Loonie, But…
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.
(Click on image to enlarge)
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.
More By This Author:
USD/CAD Forecast: Holds Key Support
Gold Forecast: Continues To Power Higher
USD/JPY Forecast: Volatility Amid Mixed Data
Comments
Log in or sign up to join the conversation.