USD/CAD Forecast Today 03/07: Limited Upside (Video)
(MENAFN- Daily Forex)
The US dollar initially did try to rally a bit during the trading session on Thursday, but we continue to simply bounce around in this pair due to the lack of any real momentum. Although I would postulate that it's very likely the US dollar remains perhaps a little bit more favored, although you could make an argument for perhaps trying to sort out short-term back and forth threading. So, if we do continue to drop from here, then I think you will probably find plenty of support, not only at the 50-day EMA, but possibly even the 1.36 level where the 200-day EMA hangs about.
Keep in mind that there is a massive amount of inflows to the United States at the moment via treasuries. So that does help. The greenback really kind of hold its own. But I think at this point, I don't know that it is necessarily strong enough to really punish its northern neighbor. I'm going to Canada soon, so the US dollar will almost certainly explode to the upside against Canadian dollar about a week after I leave Canada. It just seems to happen that way. So, all jokes aside, this is a market that I think continues to consolidate, but I still favor buying dips. The interest rates in America are obviously higher than Canada and the Bank of Canada has already started cutting rates unlike the Federal Reserve.
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US Probably Still on Top
In the end, I think the Canadian dollar will suffer at the hands of the US dollar, but in the end, I think it is somewhat limited, as the reality is that almost all economies have major issues, and therefore even though the US economy is doing better overall in relation to others, nothing is particularly good at the moment, and I think this lends itself to a slightly positive greenback, maybe if no other reason than we have a habit of using the USD in times of concern and malaise.
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