USD/CAD Forecast Today 31/01: Steady Below (Chart)

2025-01-31 04:17:57

(MENAFN- Daily Forex)

During my daily analysis of major currency pairs, the USD/CAD pair continues to put traders to sleep, but this is not a market that you should be sleeping on.
The Canadian government is basically frozen still at the moment and has to worry about negotiating a potential trade war with the United States.
This is something that they will lose, given enough time, and this one of the major reasons for the US dollar pummeling the Canadian dollar. Furthermore, we have the central bank divergence that we must speak of.

Bank of Canada and the Federal Reserve

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During the trading session on Thursday the market has been somewhat hesitant to go anywhere, and this could be due to the fact that although the interest rate differential continues to be in favor the United States, the reality is we already knew this. After the interest rate decisions coming from both Ottawa and Washington DC on Wednesday, not much has changed, and I think a lot of people are going to be paying close attention to the idea of whether or not we can finally break out.

EURUSD Chart by TradingView

The 1.45 level above continues to be a major area of interest, as it was significant resistance previously. If we can break above there, then I think you have a situation where the market would continue to go much higher. That does in fact happen, the market is likely to go looking at the 1.4750 level. On the other hand, the market pulls back, we could see the 1.43 level come into the picture, as it is a short-term support level that has been very reliable over the last couple of weeks.

Ultimately, this is a market that I have no interest in trying to get short of, unless of course something changes in the United States, because as things stand right now, Justin Trudeau and the Labour Party in Canada are going to continue to freeze the government so that they can keep some semblance of power, thereby keeping Canada with its back to the wall.

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