US dollar rallied significantly against the Canadian dollar into resistance

The US dollar has rallied significantly against the Canadian dollar during the trading session on Wednesday, reaching towards 1.29 level. That’s an area that has been resistance a couple of times now, and it looks as if we are in a significant range. Ultimately, the market continues to see a lot of back-and-forth situation, and I think that the 1.2750 level underneath continues to be massive support. Looking at this market, I think that the market is one that you can trade back and forth, perhaps using the stochastic oscillator as a trade signal. As I record this, we have crossed over in the overbought area on the hourly chart, so a pullback would make a bit of sense.

I don’t think that we will break down below the 1.2750 level underneath though, because it is massive support. I think that the market is trying to figure out where to go next, as we have competing crosswinds for the attention of this market. We have higher interest rates in America which of course is good for the greenback, but at the same time we have oil markets that have been rising which helps the Canadian dollar. Ultimately, I think that will be the situation the summer, we will remain somewhat range bound, at least in the short term. I think that longer-term the US dollar probably flexes its muscles and we go higher, but we are nowhere near that right now, as the 1.3 level above has offered so much resistance as well.