US dollar explodes higher against Loonie on Tuesday

The US dollar has rallied rather significantly during the Tuesday session, breaking above the 1.29 level. This is a significantly bullish session, and it looks like that we are going to go to the 1.30 level above, which is structural resistance. I think that we will eventually be able to break above there, but there are a couple of things to pay attention to. US interest rates are expected to go higher over the course of the year and I anticipate that we are going to see a lot of greenback strength. That is a theme that I think will continue through most of the summer.

On the other side of the trade, we have the Canadian dollar. It is highly sensitive to the oil market, which has been rallying as of late. However, overproduction still continues to be a major concern, despite the fact that there are a lot of worries about a potential Iranian blockade by the Americans again. It’s likely that the crude oil markets will continue to be very volatile, and if they fall that could be yet another reason for this market to finally break out. I think that we will pull back several times, eventually building up enough momentum to go much higher. As far as shorting is concerned, I’m not interested.