USD/CAD Forecast : 16 January US Dollar Falls Then Bounces

(MENAFN- Daily Forex)

• The US dollar fell against the Canadian dollar during the trading session on Wednesday after the CPI numbers came out much lower than anticipated, reading 0.23% instead of 0.3% month over month in the United States.
• This had the US dollar suffering against most currencies, but we have since seen the US dollar turn things around because of this. I think you have a situation where it shows just how weak the Canadian dollar is. With that being said, I think you have to also suspect that we have a situation where we are just building up the necessary momentum to perhaps break out above the 1.45 level. This is an area that has been important for some time now.

If We Do Break Higher

Breaking above the 1.45 level would be a major victory and opens up a move to the 1.47-5 zero level. Keep in mind that interest rates in America are still much higher than they are in Canada. At this point, you also have to keep in mind that the Canadian Parliament is suspended, and Donald Trump is about to enter tariff negotiations with a country that has no real leader in sight. They're basically going to be at the mercy of the Americans. Even if we were to fall from here, the 1.42 level underneath should continue to see plenty of support with the 50 day EMA hanging around that same region as well. So, I do think that any pullback from here is probably going to be, more or less, a short-term phenomenon, and it probably ends up being a nice buying opportunity in this area. I have no interest in shorting this pair. In fact, I expect this to remain a“buy on the dips” situation for the foreseeable future.

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