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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