USD/CAD Forecast 23/09:US Dollar Rallies Against Canadian

(MENAFN- Daily Forex)

• The US dollar rallied against the Canadian dollar during the early hours on Monday, as we continue to dance around the 1.38 level. The 1.38 level is an area that I think a lot of people will be paying close attention to, and as we have seen multiple times over the last couple of months, it looks like it's a bit of a magnet for price.
• Ultimately, this is a market that I think given enough time, we have to make a bigger decision but as things stand right now, there are a lot of questions about the North American economy, so does make a certain amount of sense that the USD/CAD pair continues to be sideways.

RectangleEURUSD Chart by TradingView

We have been in a bit of a rectangle with the 1.39 level above offering resistance, and the 1.37 level offering support. We are sitting right at the 50 Day EMA, and just below the 200 Day EMA as well, so I believe that it has continued to be important. If and when we finally break out of it, and I think we will, then we get a bigger move, perhaps of 300 pips based upon the“measured move.”

Keep in mind that the Federal Reserve just cut interest rates, but the Bank of Canada continues to be fairly soft as well. Furthermore, we still have a lot of issues when it comes to trade between the United States and Canada, and that of course will continue to favor the United States, because quite frankly, Canada needs to send its exports into the United States for 25% of its GDP, while on the other hand, the United States has the ability to procure things normally imported from Canada from other places. Nonetheless, it's also worth noting that the latest moves have nothing to do with the USMCA trading agreement that Donald Trump signed in his initial presidency, so this does end up being on the periphery.

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At this point, I think we have got a situation where the market continues to go back and forth, and we are just simply neutral at the moment. The closer we get to the outside of the rectangle, the more likely I am to trade in the opposite direction in order to continue this.

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