The US dollar pulled back a bit against the Canadian dollar Wednesday as we continue to see a lot of noise near the 1.30 level. It’s worth noting that the inflation numbers came out hotter than anticipated in the United States, initially causing the US dollar to spike. However, it’s likely that we have a lot of noise ahead of us because this pair is quite often noisy.
I was just at the US/Canada border 10 days ago, and it is just as busy as ever. Extreme amounts of commerce continue to cross the border, meaning that cross-border transactions made out of necessity continue to be a major problem. The 1.31 level above continues to cause a significant amount of resistance, and it is a number that I will be paying attention to as it is important. If we were to break above there, it’s likely that we could break out and go much higher. Not only is it an area where we have seen a lot of resistance, but it’s also the top of the channel that we have been in for a while, so if we were to break above there, then it’s likely that we would see quite a bit of follow-through.