(MENAFN- Daily Forex) Potential signal

• I am buying and setting a stop loss at the 1.3990 level. I am aiming for 1.4233 above.

The US dollar has shot higher against the Canadian dollar during the trading session here on Wednesday as the 1.40 level continues to offer support. All things being equal, this is a market that I think continues to grind higher, but it's going to be a grind more than anything else because, quite frankly, a lot of the transactions that take place in this currency pair are out of necessity, not necessarily out of speculation.

• It's worth noting that the 50-day EMA did offer a bit of support during the trading session, so that is a good sign that the uptrend will continue.
• I look at this as a market that might go looking at the 1.42 level, maybe even the 1.4250 level, before it's all said and done, where we have a lot of supply from a plunge back in April.

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There is still the rift between the Canadians and the Americans, but that's really not over the entire trade between the two countries. It's actually pretty much everything that wasn't taken care of in the initial deal when Trump was in the presidency the first time. So, it's not as big a deal, I think, as some people believe. That being said, the Canadian economy is highly dependent on the U.S. economy, and any rift between the two certainly would make people a little bit anxious about owning Canadian dollars or investing in Canada.

EURUSD Chart by TradingView

In general, it's at least something that you have to look at. With that being said, and the interest rate differential continuing to favor the Americans as the jobs number is unlikely to be released before Federal Reserve announcements come out, thereby killing some of the momentum for rate cuts, I think you've got a situation where you just hang on to it and continue to collect the swap at the end of each day. It's going to be choppy, it's going to be noisy, but that's the way this pair moves under normal circumstances.

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