- The US dollar initially pulled back just a bit during the trading session on Thursday, only to turn around and show signs of strength again against its Northern neighbor.
- The Canadian dollar has been taken on the chin against multiple currencies.
- At this point, the 50 day EMA just below continues to offer support and I do think that is part of what we are seeing here.
Just a simple bounce based on technical analysis. Now there is a lot of noise above, and I do think that we have a lot to deal with to break out. But given enough time, I think we do eventually continue to go higher. The 1.36 level underneath should continue to be massive support. And with that being the case, I think you have to look at it as a buy on the dip market.
Choppy and Trending
If we were to break down below the 1.36 level, then you could see a situation where we test the 200 day EMA, the 200 day EMA. Of course, it is going to be an indicator that a lot of technical traders will pay close attention to in general. I think you have to look at the difference between the two economies, as the Federal Reserve is just nowhere near cutting rates and the Bank of Canada certainly has to think about a deteriorating economy.
It looks like the US just is nowhere near doing anything about it. So, would that be the case? I think we do continue to see plenty of upward momentum in general. This is a situation where I think we eventually go to look into the 1.39 level. But this is a pair. That's a grind. It is not one that is typically very explosive in one direction or the other. This is mainly due to the fact that the 2 economies are so interconnected, so it is a pair that you have to be very patient with.
Ready to trade our Forex daily analysis and predictions? Here are the best Canadian online brokers to start trading with