US dollar tests major resistance against Canadian dollar but fails

The US dollar try to rally against the Canadian dollar during the day on Friday but gave back most of the gains as we reach towards the 1.30 level. This is an area that of course has been resistance more than once, and of course is a large, round, psychologically significant number. This is a market that continues to be very noisy and resilient, and it of course has to worry about crude oil pricing. If that rallies, that typically will push this market lower. However, on the other side we have the interest rate situation in America rising, and although the Bank of Canada recently suggested that it was going to have to raise interest rates, expectations have been tempered over the last couple of days.

The 1.3050 level above being broken of course is a very bullish sign and I think that the market would go much higher if that happened. However, we are more likely to roll over again and look for buyers underneath at the 1.28 handle. I think the choppiness in this pair should continue to be the mainstay of this market, and I believe that the overall attitude of this market is one that will be day-to-day.

The 1.2750 level underneath should continue to be massive support, and I think that the level will be broken anytime soon. Use a range bound trading strategy between 1.30 and 1.2750 underneath. Continued volatility will be the theme the summer.