USD/CAD Forecast Today 08/05: Tests Key Support (Chart)

(MENAFN- Daily Forex)

• During the early hours on Wednesday, we have seen the US dollar go back and forth overall, as the market is likely to continue to see a lot of questions asked of the current area against the Canadian dollar, because the meeting between Mark Carney and Donald Trump produced nothing.
• It wasn't necessarily that the meeting was bad, it just wasn't a conclusion to any of the situational issues between the 2 countries of US and Canada.

The 1.39 level above is an area I'll be watching very closely, because after the FOMC meeting, we could see a move above there. If we do in fact get that, it's possible that we could see the US dollar start to rally, but it's also worth noting that we are starting to see the so-called“death cross”, which is when the 50 Day EMA crosses below the 200 Day EMA, kicking off a very bearish trend.

I don't necessarily think that is a reason to short the market, but I do recognize that the US dollar itself seems to be struggling.

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I think a lot of what's about to happen will have to do with Jerome Powell and what he has to say during the press conference, because the Federal Reserve is not expected to cut rates or even move at all. That being said, a lot of people will be paying close attention to the statement and of course the answers to questions that the press offers Powell. All things being equal, this is a market that is trying to find a bottom, and I don't think the situation in Canada is exactly great.

EURUSD Chart by TradingView

With that, I think you've got a situation where even if we do drop from here, you probably will have other currencies performing better against the US dollar than the Canadian dollar. However, if the US dollar starts to take off and strengthen, the Canadian dollar could end up being very vulnerable.

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