Going forward, I expect a little bit of profit-taking heading into New Year’s Day, and perhaps a short-term bounce.
Crude OilKeep in mind that crude oil of course has a major influence on the Canadian dollar, and that’s part of what’s going on here. Furthermore, the Federal Reserve is expected to see lower interest rates being necessary for 2024, but you also have to question whether or not this will have a massive influence on the Canadian economy. After all, I think the Canadian dollar will probably be soft against most currencies, and if the United States were to head into some type of recession, ironically, it’s the US dollar that tends to perform better out of these 2 currencies, as the Canadian economy is so heavily reliant on its southern neighbor.In the short term though, I think a bounce is likely, if for no other reason than to collect profits. I believe that the 1.3320 region is an area where we could see a lot of downward pressure, and even if we were to fall directly from here, the 1.31 level underneath is massive support from a longer-term standpoint. You can also make an argument that the 50-Day EMA is starting a race toward the 200-Day EMA, presently at the 1.35 level, getting ready to kick off the so-called “death cross”, which is a longer-term bearish signal. However, I have found that anytime we see that signal in the currency markets, you are probably getting ready to see the market turn right back around because it is so late to the party.Going forward, I expect a little bit of profit-taking heading into New Year’s Day, and perhaps a short-term bounce. I would be a seller of that short-term bounce on any signs of exhaustion, and quite frankly do not think that we break down below the 1.31 level easily between now and New Year’s Day. After all, a market can only go in one direction for so long. More By This Author:Silver Forecast: Works Around The $24 LevelS&P 500 Forecast: Still Looking For A CeilingCrude Oil Forecast: Builds A Case For Support