USD/CAD Forex Signal 25/09: Breakout In Sight (Chart)

(MENAFN- Daily Forex) Potential signal:

• I'm a buyer of this pair on a daily close above 1.3920, with a stop loss of 1.38.
• I would be aiming for the 1.42 level.

The US dollar has rallied significantly during the early hours on Wednesday, as we are approaching the 1.39 level against the Canadian dollar. We are testing the top of a larger consolidation area that's been in effect for some time, with the 1.39 level being the ceiling, and the 1.37 level being the floor. With that being said, I suspect that we are going to continue to see a lot of back and forth, but if we can get above the 1.39 level on a daily close, we might finally see that break out to the upside that I've been talking about being very possible.

Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money US versus Canada

This is a bit of a different currency pair than many others, because it directly speculates on the trade tensions between the United States and Canada, as well as cross-border traffic as the 2 economies do so much trade. Ironically, it's worth noting that Canada has a whole list of problems internally, not the least of which will be the fact that it recently shed 65,000 jobs. Conversely, the United States has the benefit of being the world's reserve currency, and of course a central bank that although has recently cut interest rates by 25 basis points, still sees a world in which interest rate cuts may not be as aggressive as a lot of people were hoping.

EURUSD Chart by TradingView

If we do get a bit of a pullback from here, I think there's plenty of support at the 1.38 level, as well as the 1.37 level, not to mention the fact that the 1.38 level also has the 50 Day EMA sitting there. In other words, I think there are plenty of reasons to be“buy on the dip” as far as trading is concerned, because the interest rate differential pays you at the end of the day, and it certainly looks as if we have formed some type of bottom, and now just need some type of reason to get going to the upside. This could include a Federal Reserve that's not cutting as quickly as people want, or perhaps some type of economic problem out there that has people running to the US Treasury market for safety.

Ready trade our USD/CAD Forex forecast ? Here's some of the best regulated forex brokers in Canada to check out.

MENAFN25092025000131011023ID1110112091