USD/CAD Today 24/6: USD Rallies, CAD Struggles (Chart)
Date
6/24/2024 7:21:16 AM
(MENAFN- Daily Forex)
The US dollar has bounced a bit during the trading session on Friday as PMI numbers in the United States came out hotter than anticipated. Furthermore, we also had a technical area just underneath which of course, being the 50 day EMA, attracted a certain amount of attention. Various trading systems and algorithms will be paying close attention to the 50 day EMA, as per usual.
This is mainly about Canada
The US dollar has rallied against the Canadian dollar quite significantly over the last several months. Although we've had the occasional pullback, this shows that there is a lot of resiliency in the green back. This is not only about the interest rate differential between the United States and Canada, but it is also about the Canadian economy itself struggling a bit. If that's going to continue to be the case, then there's no reason why the US dollar won't continue to go higher.
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Remember, crude oil used to be one of the big drivers for the Canadian dollar, but against the United States, right now just doesn't play out because the US produces so much crude oil now. So, while oil may influence a Canadian dollar against multiple other currencies, it won't necessarily do so against this one.
Even if we did break down below the 50 day EMA, then we could go looking to the 1.36 level where the 200 day EMA is racing towards and an area that we have a lot of market memory at. I'm more than willing to buy down there, but I don't even know that we get that move. A bounce looks more likely than not. Therefore, if we can break above the 1.38 level, I think that brings in more FOMO, perhaps to the 1.39 level. In general, this is a market that continues to be noisy, but I think overall positive. That being said, USD/CAD is a pair that tends to be very choppy, so make sure that you are comfortable with that.
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