USD/CAD Forecast: Has a Choppy Wednesday

Furthermore, the interest rate markets have been cut all over the place as well, so that has some things to say as well.

  • The USD/CAD has gone back and forth during the trading session on Wednesday as the market may be running into a little bit of exhaustion.
  • Furthermore, the interest rate markets have been cut all over the place as well, so that has some things to say as well.
  • Ultimately, I think this is a market that is likely to see signs of exhaustion we could see a pullback occur.

The 1.35 level should be supported, especially as the 50-Day EMA sits just below there. The 50-Day EMA is likely to continue to attract a certain amount of attention, so I think that any move toward that area should be of interest. On the other hand, if we turn around a break above the top of the candlestick for the trading session on Wednesday, then I believe that the market could go looking to the 1.38 level. The 1.38 level is an area where we would see previous resistance come back into the picture, so we could see selling pressure. On the other hand, if we were to break above there, then it opens the possibility of a move to the 1.40 level.

Volatility and Choppiness Ahead

Keep in mind that the Canadian dollar is highly levered to the crude oil markets, and it is worth noting that the West Texas Intermediate Crude Oil market fell rather hard during the day, slicing through the support level to show extreme weakness. In that sense, you would anticipate the Canadian dollar to soften. At the same time though, we have seen interest rates in the United States fall so it’s going to make quite a bit of sense where you could see a lot of volatile and choppy behavior.

I do believe that this is a scenario where things are going to be a bit noisy, which does make quite a bit of sense considering that we had recently pulled back down to the 1.32 level. The 200-Day EMA sits right around that area as well, so if we were to break down below there that I would consider this a major trend change. Until then, I think it’s difficult to imagine shorting this market anytime soon, especially as we see so many economic headwinds out there that will not only work out for the US dollar but will also drive down demand for oil.

USD/CAD

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Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.