The US dollar has made some significant advances versus the Canadian dollar following a 4-month low that was registered in mid-October (1.2828). Since then, a rebound in the greenback and more weakness in crude oil has added to pressure on the loonie, which is on track to challenge the 11-year high of 1.3456. The greenback is currently buying 1.3305 Canadian dollars.
Looking at the technical picture, it appears quite favorable for further US dollar gains. Since November 6, the pair has broken above its Ichimoku cloud and the top of the cloud (currently at 1.3178), has acted as support lately. Furthermore, since the end of October, the Tenkan-sen line has been above the Kijun-sen line, which is bullish.
The 200-day average is at 1.2744. The 200-day average has not been challenged since August of 2014; such has been the strength of the dollar uptrend. The RSI at 59 is bullish without any signs of approaching overbought levels yet.
Overall, it appears that the prospects for a retest and possibly a break of the 1.3456 multi-year high are positive. Highly anticipated events such as even weaker oil prices and more signs that the Fed will proceed with an interest rate hike in its next meeting, could push the pair to those levels.
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