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MENAFN- Daily Forex)
Another day, another plunge from the absolute scorching highs that we saw right at the open on Monday of this week, as Tuesday has been more of the same. The reality, though, is nothing's changed. The only thing that's changed is we are not going to see a tariff war. At least we shouldn't. Having said that, there are still structural issues that keep Canadian assets weak, especially in the face of the US dollar, which enjoys a much higher interest rate than the Canadian dollar.
That being said, this week is going to be particularly interesting because not only the trade tariffs, but we also have employment on Friday from both of these countries. What I think this is setting up for is a potential buy on the dip scenario.
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1.43 has been rather reliable support for a while, and I would anticipate there at least will be some type of reaction when we get down there. Furthermore, we have the 50 day EMA and the 1.42 level underneath there that offers support. So, I am looking forward to buying this USD/CAD pair . I just don't want to jump in out of the blue and do it. This might be a Friday afternoon trade, I don't know, but this is a pair that you need to watch because everything that made this pair rise the way it did is still very much on the table.
Canada doesn't even have a functioning government at this point, and of course, despite the fact that tariffs are not an issue, or at least probably won't be an issue because they've been put on hold, the reality is the Canadian economy is still a mess, and they continue to see rate cuts out of the Bank of Canada while the Federal Reserve is on hold. This is a simple matter of being patient and waiting for the market to start bouncing again before you start buying.
EURUSD Chart by TradingView
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