US dollar initially rallies against Canadian dollar only to turn around

The US dollar has initially tried to rally during the trading session on Tuesday but found the 1.3050 level to be a bit too much to overcome. We have fallen rather hard since then, but I think there is plenty of support underneath to keep this market going higher. A supportive candle should be a nice buying opportunity, and I think that the market will continue to be a “by on the dips” scenario, if we can stay above the 1.2950 level.

Oil markets of course will have a certain amount of influence on the Canadian dollar, but the interest rate markets have driven the US dollar higher against almost everything, so I think that the market will continue to favor the upside. I like the idea of picking up value and if we can break above the 1.31 handle, this market should be able to go much higher, perhaps 1.33 level followed by the 1.35 level after that. Ultimately, this is a market that I think continues to find plenty of buyers underneath, but obviously we will have the occasional pullback.

Overall, this is a market that I think we should continue to see volatility, but it gives us an opportunity to get involved in little short bursts as this market does tend to be choppy in general. I like the idea of buying on the dips and adding to a larger core position.