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MENAFN- Daily Forex) Potential signal:
- I am a buyer of this pair right now.
- With a stop of 1.42 and a target of 1.4475
The US dollar has rallied a little bit during the early hours on Tuesday against the Canadian dollar, despite the fact that CPI numbers in Canada came out relatively strong. That being said, there is a lot more going on in this pair than CPI, needless to say. After all, it's ground zero for all things tariffs. And that will continue to capture a certain amount of attention.
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At this point, it looks like the 50 day EMA is at least attempting to form a little bit of a resistance barrier, but keep in mind, we have the Federal Reserve announcement on Wednesday and that will be a big mover because traders are going to be paying close attention to what Jerome Powell has to say. However, Jerome Powell is important, but not as important as Donald Trump.
So, with that being said and the appointed Prime Minister in Canada, Mark Carney, very hawkish when it comes to tariffs. I don't think this ends anytime soon, and therefore the US dollar will remain elevated against the Canadian dollar in relation to other currencies. That doesn't mean it goes up every day. It doesn't mean that it breaks out. It just means it's not going to fall that far. The 1.43 level seems to have offered a bit of support.
EURUSD Chart by TradingView
Underneath there, we have the 1.42 level offer in support also. So, I think there's a region of buying pressure there. If we do break to the upside, then the 1.45 level above is an area that a lot of people have to pay close attention to, as it has been an important resistance barrier not only recently, but over several years. anything above there, it really eviscerates the Canadian dollar. We did break above there once at the announcement of the tariffs, but since then, we've seen a lot of things go back and forth and hesitations and a lot of nonsense really on both sides of the border. So, with that being said, I think a simple bounce makes the most amount of sense, unless of course Jerome Powell completely eviscerates the dollar during his statement, which in that case, even if this falls, it won't fall in relation to maybe against the Japanese yen or the way the US dollar will shrink against the British pound, euro, et cetera.
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