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MENAFN- Daily Forex)
- During my daily analysis of the major currency pairs around the world, the USD/CAD pair caught my attention at the 1.4350 level has offered a major support area multiple times and has of course been an area of great interest.
- Whether or not that holds remains to be seen, but at this point time I think you got a situation where traders will continue to look at the Canadian dollar with a bit of distrust, as the Canadian economy is sluggish, and of course we have the mess in the Canadian government.
Tariffs and Central Banks
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I do believe that this could be a very volatile market, as the Bank of Canada and the Federal Reserve both have meetings this week, and quite frankly Wednesday could be a complete disaster as we have seen in the past, as the central banks will be slamming the market back and forth. While the Canadians are expected to cut rates by 25 basis points, the Federal Reserve is expected to sit still.
Because of this, I do prefer the US dollar, but ultimately, I also recognize that we have a lot of issues out there when it comes to the Canadian economy, and I don't think that the Bank of Canada can do much to lift the Canadian economy at the moment, due to the fact that the economy not only will have to face the idea of tariffs from the United States, but it's also the place where we see the government essentially not working. I cannot imagine trying to negotiate a tariff with the Americans when you don't even have a functioning government. Canada is essentially a sitting duck at the moment.
EURUSD Chart by TradingView
Even if we were to break down from here, the 1.42 level should be a significant support level, and therefore I think you've got a situation where you would see that as being very important, and I think ultimately the 50 Day EMA sitting just above there could also offer a significant amount of support. As things are right now, I'm bullish of the greenback.
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