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The USD/CAD pair is one that I'm watching closely due to the fact that we had recently broken so much higher over the course of the last month or so. The fact that we broke above the psychologically important 1.40 level has captured quite a bit of attention as well.
Keep in mind that it was Thanksgiving on Thursday in the United States, so there's very little in the way liquidity. Canadian traders are on board, but the traders in New York and beyond as far as America is concerned are basically persona non grata. With that being said, the overall trend is to the upside, and I think that is something that you need to keep in the back of your mind.
Because of this, it makes a lot of sense that we would eventually see a bit of follow through, but it's also worth noting that we are at a major area of resistance just above. In other words, it is going to take another fundamental reason beyond what we already have for the US dollar to continue going higher.
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The technical analysis for this USD/CAD pair is very bullish, with perhaps the exception that the 1.42 level has been a massive ceiling multiple times in the past. Nonetheless, we also have the 50 Day EMA near the 1.39 region, and of course the 1.40 level will be an area that I think a lot of people will be looking at as a potential short-term support. Underneath there, we have the 1.3950 level, which in and of itself had been important previously as well. In other words, I think there are a lot of things underneath that could keep this market somewhat afloat, so be aware of that.
EURUSD Chart by TradingView
All of this being said, the one thing that might move the market over the next 24 hours would be Canadian GDP, coming out at 1:30 PM GMT on Friday. Obviously, if that ends up being a huge miss, that could drive the US dollar higher against the Loonie again.
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