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    Technical Analysis – US dollar rises to 11-year high against loonie on oil price drop

    The US dollar rose to its highest in 11 years against its northern neighbor the Canadian dollar, after the price of oil crashed again to below 47 dollars a barrel.

    The US dollar had some trouble to convincingly break the psychologically important 1.30 level following initial attempts in mid-July.  The 2009 high of 1.3063 was overcome on 31st July, which led to fresh 11-year peaks at 1.3175 – the highest since September of 2004.

    However, the RSI is signaling overbought conditions, while the MACD is also signaling caution.  A correction could see the pair test the key 1.30 level on the downside as well as the 21-day moving average currently at 1.2913.  Below those two points, an even deeper sell-off could lead to a test of the 200-day average at 1.2218 and the 7-month low of 1.1919.  But for now such a deep correction appears unlikely.

    The other key factor that should be closely watched is the price of crude oil, as further sharp sell-offs in oil could lead to fresh highs for the pair despite its overbought condition.

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