USD/CAD Forecast: After 50 Basis Point Cut in Ottawa

• The US dollar initially pulled back during the trading session on Thursday, only to turn around and show signs of life.
• The market certainly looks as if it is doing everything it can to break out, and it is probably worth noting that the 1.42 level is an area that’s had very stringent resistance previously.
• If we can break above that level, then it will allow the market to truly take off. As I write this article, we are doing everything we can to slice through it.

Bank of Canada

This week, the bank of Canada has cut interest rates by 50 basis points, suggesting that the Canadian economy is in serious trouble. For what it is worth, I read a stats in the last 24 hours that 25% of Canadians are now living below the poverty line, and that is a situation that could get worse with the incoming administration in the United States not worried at all about placing tariffs on its Northern neighbor if it doesn’t clean up the border. One thing is for sure, while Donald Trump does tend to offer a lot of bluster, he does not hesitate to slap tariffs on foreign countries.

Top Forex Brokers

1

Get Started 74% of retail CFD accounts lose money Read Review

Now that the bank of Canada has flinched, the Canadian dollar will continue to suffer. Short-term pullbacks should continue to be buying opportunities, with the 1.41 level being significant support, and the 1.40 level being massive support. Anything below there would change things obviously, but I just don’t see how that happens easily.

With this, I think the market is likely to continue to favor the greenback, but we are getting it extreme levels. In the past, when the USD/CAD pair has reached the 1.45 level, we tend to turn around. If we blow through that level, you are going to see the US dollar act like a wrecking ball to the Canadian economy. Furthermore, you might see the US dollar destroy everything else in its path, which can be seen in the EUR/USD pair, the NZD/USD pair, and the AUD/USD pair, just off the top of my head.

Ready to trade our USD/CAD daily analysis and predictions? Here are the best Canadian online brokers to start trading with.