USD/CAD Forecast Today - 02/10: Unstable Support (Video)
Date
10/2/2024 2:42:17 PM
(MENAFN- Daily Forex)
The US dollar initially did rally against the Canadian dollar but then plunged later as we had received a little bit of soft economic news. So, with the announcement of the ISM manufacturing PMI, coming out at 47.2 instead of 47.6, we started to see the US dollar crumble a bit against the Canadian dollar. It's probably also worth noting that the oil market had a wild swing to the upside, and that might be part of what we are seeing here. Underneath the current trading environment, we have the 1.3450 level, which is an area that does offer a certain amount of support.
If this happens...
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If we reach that area, I would anticipate that we would see a bit of buying. As long as we can keep that region somewhat stable, then I think the US dollar has a chance of rallying. For what it is worth, the Moving Average Convergence Divergence Indicator is in divergence, suggesting that we may be in the middle of a bottoming pattern. That being said, it doesn't mean that a bottoming pattern is going to be easy to accomplish, nor is it something that happens quickly. However, the market is likely to continue to see a lot of volatility in the meantime, so while I do think that buyers are coming back into the picture, I also recognize that there will be a lot of noise.
If we can rally at this point, then the target would be the 1.36 level where we just saw the so-called death cross with the 50-day EMA dropping below the 200-day EMA with both of these moving averages by themselves potentially offering resistance. Remember, this is a very choppy pair under the best of circumstances so a return to bullish behavior and an attempt on those moving averages would probably be more likely than not. If we can break above there, then the market could go much higher, but at this point in time I think it's a matter of fighting one battle at a time.
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