So, I think it's probably only a matter of time before we go higher. If we were to break above the 1.37 level, then the market is likely to go looking to the 1.3850 level. That's an area where we had seen some resistance previously, but the top of the overall range is near the 1.39 level. If we turn around and break down below the 1.36 level, then the 200 day EMA could be targeted near the 1.35 level.

The Two Economies are Attached

Keep in mind that these two economies are highly intertwined and therefore USD/CAD is a very noisy currency pair. As the cross-border transactions are massive, anybody who's crossed the border at either Buffalo or Detroit can tell you just how busy the traffic is. Not to mention other places like Thousand Islands. Ultimately, the Canadian economy is struggling a bit, and at this point in time, I do think that the US dollar continues to outperform.

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The crude oil part of the equation is no longer a big deal either, as the United States produces so much crude oil. So, with that, it comes down to which bank is tighter. And right now, that's the Federal Reserve. So, I do think eventually we will go higher, but it is going to be typically choppy. Because of this, you need to be cautious about the size of your position, but also recognize that the most important thing you can do when trading the US dollar against the Canadian dollar is using patience. It's not exactly the fastest moving currency pair out there.

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