(MENAFN- Daily Forex)

• The USD/CAD pair fluctuated around 1.41 on Thursday, forming another potential shooting star pattern.
• A short-term pullback toward 1.40 seems likely, though buyers may reemerge there amid ongoing U.S. dollar strength and trade-related volatility.

The US dollar has gone back and forth during the trading session on Thursday against the Canadian dollar, with the 1.41 level continuing to attract attention. The fact that we formed a shooting star during Wednesday's session-and appear to be repeating that on Thursday-suggests the potential for a pullback toward the 1.40 level, an area that I think will continue to be very important.

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The 1.40 level is a large, round, psychologically significant figure and an area that previously acted as resistance, so it makes sense that the market could dip toward it. The 50-day EMA sits just below, which implies that buyers may eventually step in. If we break above the highs from both Wednesday and Thursday, market participants could push this pair up toward the 1.4250 level. That zone has seen heavy selling in the past and remains an area of considerable supply.

EURUSD Chart by TradingViewVolatile Pair. Still.

Ongoing volatility stems from trade dynamics between the U.S. and Canada, compounded by lingering uncertainty following negotiation setbacks and speculation that Canada may lag behind economically. Whether or not that proves true, the reality is that Canada depends heavily on the U.S., sending roughly 75% to 80% of its exports south, while the U.S. exports relatively little northward in return.

In addition, a global U.S. dollar shortage persists, and the Federal Reserve has shown no inclination to cut rates sharply, fueling renewed dollar strength. The recent movement in this pair over the past 36 hours may simply reflect short-term exhaustion. Any near-term pullback could attract value hunters looking to reenter the market.

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