USD/CAD Forex Signal: US Dollar Continues To Climb Against Loonie

The US dollar has risen again during the Monday session against the Canadian dollar as we continue to see a lot of upward pressure in general. This does make a certain amount of sense considering that the jobs number in the United States was hotter than anticipated. And I do think that continues to be a scenario that plays out here.

Canada has recently cut rates while the Federal Reserve is likely to keep rates rather tight. So, with this being said, I think you've got a situation where traders will continue to try to push this pair towards the 1.39 level. But I also recognize that it is a market that is pretty choppy and noisy. And why wouldn't it be? There is a massive amount of trade between the two economies.

(Click on image to enlarge)

USD/CAD Signal Today 11/06: USD Rises vs CAD (Video & Chart)


Backfilling ahead

And with that being said, I think you're going to get a lot of backfilling here and there. Short-term pullbacks offer value that traders take advantage of. And if we could break above the 1.39 level, then we could test 1.40, which a lot of people out there are already starting to call for. So with this, I like the idea of being long of the market because on top of that you do have a little bit of an interest rate differential although it's not a massive one like you see against perhaps the Japanese yen. With this I have no interest in shorting this pair and I believe that both the 50 day EMA and the 1.36 level offer massive support levels on any pole bag. Crude oil has recovered a little bit, but it doesn't matter as much in this pair anymore due to the fact that the Americans are producing more than enough oil for themselves at this juncture. I do believe that eventually the buyers overwhelm.

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