USD/CAD Forecast Today 18/07: Tests Major Resistance (Chart)

(MENAFN- Daily Forex)

• The US dollar rallied quite a bit during the trading session here on Thursday as we have now broken above the 50 Day EMA during the session.
• This is the first time the US dollar has been above that indicator since April 2, which is something that you should be paying attention to.
• While I'm not necessarily a big moving averages trader, I recognize that this does mean that the market is at least trying to change its overall attitude.

Technical Barrier Above

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I see a massive technical barrier above, in the form of the 1.38 level. If we can break above the 1.38 level, then it's possible that we could go looking to the 1.3850 level next. That being said, I do recognize that this is a very choppy market to say the least, but what's interesting about this pair is that there is a massive amount of cross-border traffic that occurs between these 2 nations, and we still don't have a significant trade deal. Quite frankly, the Canadian economy is highly dependent on the United States, and although there are some political speeches in Canada at the moment about breaking away from US dependence, that's something that would take several years. In other words, the Canadians are going to need to come up with some type of trade deal to stabilize the economy.

EURUSD Chart by TradingView

That being said, we also have to keep in mind that the US dollar is starting to turn around against multiple currencies around the world, and the Canadian dollar course won't be any different. We see the Australian dollar get hammered, as well as the New Zealand dollar, the Japanese yen, and so on. Because of this, I would be paying close attention to a break above this ceiling near the level 1.38, and if we can get significantly above there, I'd be interested in buying. If we pull back from here, I think there's plenty of support near the 1.3550 level to keep this market somewhat afloat, at least as things stand right now.

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