USD/CAD Forecast Today 21/5: Expect Choppiness (Video)
Date
5/21/2024 2:52:25 PM
(MENAFN- Daily Forex)
The US dollar initially did rally a bit during the course of the trading session on Monday, but it seems like it continues to struggle with the 50 day EMA just above. That being said, there's also a lot of support at the 1.36 level and we have seen both support and resistance at this area multiple times over several months.
If we can turn around and break above the highs of the Friday session, then you could go looking to the 1.38 level. That obviously would be a general US dollar strong move, which we may get due to geopolitics, but right now this is a
market that I think is in the midst of trying to form some type of basing pattern.
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If we were to break down below the 1.3575 level, then I think we'd probably go looking toward the 200 day EMA underneath looking to see whether or not we can bounce from that long-term indicator . Regardless, this is a pair that is typically very choppy and with the interconnectivity of both of these economies, that makes perfect sense. I think you will continue to see a lot of noise, but ultimately, I do think that we will eventually have to resolve all of this. I think choppiness is something that you can expect going forward as per usual US dollar movement will continue to be the driver
But one would have to wonder whether or not the US dollar suddenly spikes in some errant headline. I think that is probably the real danger here more than anything else. The path lower, although very possible, has a lot of noise ahead of it that the path higher just doesn't seem to have at the moment. Ultimately, USD/CAD is a market that I think will continue to pay close attention to risk appetite , and that of course might be the biggest mover. Keep in mind that the Canadian economy is highly sensitive to the US economy, so that's part of the confusion in this pair on a somewhat daily basis and therefore you have to be very patient for the biggest move.
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