- During my analysis of major currency pairs during the Wednesday session, I noticed that the US Dollar has dropped again against the Canadian dollar, but that is starting to slow down.
- Furthermore, the US dollar is sitting right at the 50 Day EMA, and an area that has been important more than once.
- This is an area, in the form of 1.43, that has been important for some time, and I think that the support level extends all the way down to the 1.42 level. At this point, we might be setting up a bit of a buying opportunity.
Technical Analysis
Top Forex Brokers
The technical analysis for this USD/CAD pair is rather strong over the longer term, but the last couple of days have been rather brutal for the US dollar. That being said, the market is likely to continue to see a lot of buyers underneath, but the question is whether or not it ends up happening with the next couple of days remains uncertain. However, the technical analysis continues to favor the 50 Day EMA causing a bit of a reaction, followed by the 1.42 level. The level of 1.42 has been important for some time, and therefore we need to pay close attention to it.
Perhaps more important than the technical analysis is going to be the fundamental analysis at the end of the day on Friday. After all, the Non-Farm Payroll announcement come out of the United States at the same time the employment figures come out of Canada. Any divergence between those 2 economies could kick off the next big trade. I think ultimately, the US dollar will find plenty of buyers, but I also recognize that it could be rather noisy at this point. I am a buyer of this pair and not willing to sell it, at least not until we see some type of massive fundamental reason to suddenly want the Canadian dollar. If I wanted to short the US dollar, it certainly wouldn’t be against the Loonie.
Ready to trade our USD/CAD Forex forecast? Here’s some of the best regulated forex brokers in Canada to check out.