USD/CAD quiet during the previous week

The US dollar did very little against the Canadian dollar during the previous week, as we continue to hang about the 1.29 level. I think that the market is about to enter a range of consolidation, something that makes a lot of sense as the economies of both the United States and Canada are highly intertwined with each other. We have to worry about the oil markets obviously, because the of course have their influence on this pair, but if we can break above the top of the previous couple of candles, at roughly 1.31, then I think that we will go grinding towards the 1.35 handle, and that is the key phrase here “grinding.”

Alternately, if we break down below the 1.28 level, then I think we probably drift down towards the 1.26 handle. This is a very tight range that we find ourselves in, and I think we’re trying to figure out which direction to go, something that’s going to be very difficult to deal with if you are a longer-term trader. My suggestion is to let the market decide first, and then follow. Trying to anticipate where this pair goes is going to be very difficult right now because we have so many moving parts. We have a housing bubble in Canada, we have the US dollar under pressure, but at the same time we have higher interest rates coming out of America. It’s probably best to leave long-term trades off the table until we get some clarity.