The US dollar continues to see a lot of noisy behavior as the war in Iran causes massive volatility in various assets. At this point, oil is another thing to think about in this particular market.
USD/CAD
The US dollar initially fell during the trading session on Tuesday, but as we look at the chart right now, the 1.3550 level is the beginning of support that I think extends down to the 1.35 handle. Ultimately, this is a market that I think given enough time will probably try to find its way back to the upside as we are testing the bottom of a fairly well-defined consolidation range.
Oil has cooled off a bit and that helps the pair rise a bit, but we could also make an argument that if geopolitical tensions continue the US dollar will strengthen anyways. With that being said, I think you need to look at this as a simple range that you could trade if you are nimble enough, and position size correctly here.
Support and Demand Zones
When you zoom out to the longer term, the 1.3450 level is also support. All things being equal, this is a market that I think is sitting in an area with a lot of demand. So, while I'm not looking for the moon here, I think you probably get a little bit of a bounce towards the 50-day EMA.
If we were to break down below the 1.3450 level, that changes things. But ultimately, this is a pair that I think is still just kind of hanging around, bumbling around, trying to figure out where it wants to go longer term. In the meantime, I expect a lot of choppiness in this market, as there are a lot of headwinds.