(MENAFN- Daily Forex)

• USD/CAD attempted to recover but stalled near the 50-day EMA and the 1.40 area, reinforcing resistance.
• Despite persistent volatility and cross-border trade flows creating noise, the pair appears to be consolidating between 1.39 and 1.41 with upside potential if broken.

The US dollar initially tried to recover against the Canadian dollar on Wednesday but has been found lacking as the market turned around pretty quickly as we approach the 50-day EMA. The 50-day EMA also sits at the 1.40 level. So that added a little bit of extra fortitude to the idea of resistance. That being said, it's hard to imagine a scenario where this market simply falls out of bed and goes much lower without at least putting up a fight. After all, the US dollar is starting to fight back against several other currencies, and the Canadian dollar, of course, won't be any different eventually.

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The markets continue to see a lot of volatility and questions asked of them, and I just don't see how that changes anytime soon, but this is a market that does tend to be noisy anyway, mainly since there's just so much in the way of necessary transactions that occurred due to cross-border trade that it's not a clean idea of speculation. Most of the time, it is a lot of big corporations sending money back and forth. Quite often, it's the same corporations that send it up across the border into Canada and pull it back down into the United States, for example, automotive manufacturing, which is part of which is done in Canada and needs to be paid in Canadian dollars for the workers and invoices, etc.

EURUSD Chart by TradingView

With that being said, this is a major factor as to why this pair is choppy. Nonetheless, I think what we're looking at here is that the market is trying to form some type of consolidation area, perhaps using the 200-day EMA as a bit of a floor, somewhere around the 1.39 level and the 1.41 level above as resistance. If we can break to the upside, I'm still looking for a move to the 1.4250 level, but we'll just have to wait and see.

We are seeing a lot of random noise in the Forex markets as people are starting to bet on the US dollar crumbling again, but this has happened multiple times here along the way. And I don't think this is too different than any of the others.

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