USD/CAD Forecast Today 23/5: Expect Noise (Video+Chart)
Date
5/23/2024 2:51:47 PM
(MENAFN- Daily Forex)
The U.S. dollar has fallen somewhat significant in the early hours against the Canadian dollar, but then turn around to show signs of life. The 50 day EMA is sitting right in the middle of the candlestick, and at this point in time, if we can turn around and break above the 1.37 level, then we will have cleared a little bit of a resistance barrier.
Noise and Choppiness is the Norm
Nonetheless, this is a
market that I think continues to be rather noisy and erratic. But I also recognize that it is a situation where we could eventually break much higher. After all, we've had a nice little pullback and this area here right around 1.36 has been support in the past. However, the market is likely to continue to see a lot of choppy behavior. With this being the case, need to be cautious with your position sizing, recognizing that this pair can be very difficult to hang onto that point in time.
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That's typical for this USD/CAD pair because the two economies are so hugely intertwined. It used to be that you could trade this through the prism of what's going on in crude oil , but you really can't do that anymore due to the fact that the United States is a major production center of oil as well. It's not just Canada.
So, with this, it comes down to be, the overall attitude of interest rates between the two central banks and like whether or not the Federal Reserve is going to remain tighter than the Bank of Canada, which it is, that should continue to favor the US dollar over the longer term. But it also could cause a little bit of noise here and there. With that, recognize that you will have to be very patient with any trade that you do put on, and recognize also that it is a very slow and steady pair most of the time, as a straight shot in one direction or the other is more of an exception than the rule in this pair.
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