- During my daily analysis of major currency pairs around the world, the USD/CAD pair has captured my attention as it has been so volatile. At this point, I think what you have is a situation that is mainly focusing on a lack of volume, as the Americans are way for the Martin Luther King Jr. Day holiday, and only the Canadians are sitting at their desks.
- Furthermore, there is a whole plethora of things that could come into play when it comes to the Canadian dollar, and the world waits to see what Donald Trump will do about the Canadian border.
Donald Trump
Donald Trump is likely to slam Canada with tariffs, but the question at this point in time will be how bad and aggressive they will be. Remember, Canada isn’t bothering to convene Parliament at the moment, to save the political career of Justin Trudeau. Because of this, and the fact that the Liberal Party will continue to drag out the situation in Canada, it’s likely that the US dollar will run roughshod against the Canadian dollar over the next couple of months, but we really don’t know how this will play out until it actually happens. Today will be the day we begin to see reality, instead of speculation.
Ultimately, this is a market that will continue to be noisy, but I think that any time it dips, you have to be looking at this through the prism of picking up “cheap US dollars. This is because the Canadian situation right now is untenable for investment, and the noise coming out of Washington DC is just another problem, but quite frankly most of what’s going on in Canada is self-inflicted.
At this juncture, if we were to break above the 1.45 level, then it’s likely that this pair would go much higher, perhaps reaching the 1.4750 level. As we have seen during the day on Monday, dips will get bought into and we have bounced enough from the stretch lower to see a return to the overall consolidation we have been in for the last couple of weeks. Quite frankly, the dam could break against the Canadian dollar, depending on what Donald Trump decides.Top Forex Brokers
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