- The US dollar rallied a bit during the trading session on Thursday, but did give back quite a bit of those gains as well.
- This tells you pretty much everything you need to know about the US dollar trading against the Canadian dollar.
- And that would be that the pair is going to continue to be very noisy and volatile.
- That makes sense because we have a lot of things going on as far as the tariff war is concerned.
At this point in time, there's no real movement in one direction or the other to solve the issues. So if that's going to be the case, the Canadian dollar will eventually be eviscerated, but if they do make some type of progress and they are running out of time, it's very likely that we will see the US dollar give up some of its strength.
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Ultimately, the Federal Reserve, I think, is partially to blame to what's going on here as well, because it was clear yet again that Jerome Powell has no idea what's going on. He blamed a lot of the economic woes on tariffs, which haven't even been levied yet. So who knows? But at this point in time, this is a pair that's basically range bound. You need to keep that in the back of your head and just leave it at that.
A Major Swing Low
The 1.42 level I think is a major swing low that you need to pay close attention to. If we were to break down below there, it could send this pair plunging a bit. And I think in that environment, you would probably see the US dollar struggling against most currencies because even on days where the dollar has struggled, it's done fairly well or even gained against the Canadian dollar. The Canadian dollar is probably one of my least favorite currencies in the world right now. And with oil continuing to struggle overall, I think that adds to the problem also. At this point, I look at dips as potential buying opportunities, but I also recognize we probably don't have anywhere to be from a longer term standpoint at this moment.
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