USD/CAD Forecast Today 05/7: Testing Support (Video)

2024-07-05 04:37:19

(MENAFN- Daily Forex)

The Thursday session was rather quiet in the US dollar against the Canadian dollar currency pair, which makes quite a bit of sense due to the fact that it was Independence Day during the session on Thursday.
After all, take a look at liquidity and who generally trades this pair.
Generally, it's traded back and forth between New York and Toronto.
As large trading firms continue to battle back and forth in a currency pair that has a lot of cross border trading.

So, with that being the case, the market is currently sitting on a support area that I think is important. I do think that Friday could be a very big day specifically for this USD/CAD pair. And the reason I say that is that not only do we have the non-farm payroll numbers coming out of the United States, but we have employment numbers coming out of Canada simultaneously.

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Support at 1.36?

We're now looking at the 1.36 level underneath as potential support, and we also have the 200 day EMA in that area as well. This is why I suspect we could get a bit of a bounce, although keep in mind the dollar may act differently here than it does in other pairs. So, you could have a situation where the US dollar sells off a bit, but the US dollar strengthens against the Canadian dollar perhaps while simultaneously selling off against the British pound, the Australian dollar, et cetera.

Because one of the things that makes this so interesting is that Canadian labor numbers are all over the place. The Bank of Canada has already cut rates, so that of course comes into play. And of course we have a lot of technical interest in this area, so I think it all sets up for a potential bounce. However, if we were to break down below the 1.3550 level, then it's very possible that we could grind our way back down to the 1.34 level.

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