The US dollar has fallen during trading here against the Canadian dollar on Thursday as we continue to see yields soften a bit and that of course has people running away from the US dollar.
The idea of safety trade not necessarily being a thing as peace in the Middle East seems to be a very real possibility certainly helps as well. That being said, be aware of the fact that this is a pair that is typically very choppy and range bound, so therefore I think you need to watch the 1.37 level.
Technical Resistance and Long-Term Outlook
The 1.37 level is the beginning of resistance that extends to the 1.3750 level. If we turn around and break above the 50 day EMA, then it opens up the possibility of going to the 200 day EMA, possibly even the 1.39 level. This is a pair that I do like to the upside eventually, but we need to see some type of bounce.
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I want to get on the right hand side of the V. If I cannot, then that is fine, I will just step back because I do not want to short, at least not right now. If I want to buy the Canadian dollar, I will buy it against other currencies like the Japanese yen for example.
The USD/CAD is a market that I think will remain range bound and probably if we look at a bigger picture, the 1.35 level and the 1.40 level are your outer bounds. Right now, we are kind of in the middle of this. So, if we get a bounce, that might even be a longer-term signal, we will just have to wait and see.
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