USD/CAD Forecast 02/10: Key Resistance In Focus (Video)

(MENAFN- Daily Forex)

The U.S. dollar has continued its march higher against the Canadian dollar on Thursday as interest rates continue to climb in America and the interest-rate differential continues to be intact.

The Canadian economy has been doing much worse than the U.S. economy, and with the jobs number coming out on Friday, we will have some type of read on America beyond what we've had this week. This week, we had PCE a little lower and growth a little higher, yet another reason to think that the United States is going to outperform.

Top Regulated Brokers1 Get Started 74% of retail CFD accounts lose money That being said, we're stretched

We're completely stretched at this point. We are testing a major resistance barrier, but short-term pullbacks, I think, could still offer buying opportunities. A lot of this will come down to interest rates, so pay close attention to the 10-year yield, the 2-year yield, etc., in America.

I think ultimately, you have to believe that this is a market that's almost impossible to short right now because the Canadian dollar does not have the backing of oil markets like it once did, at least not against the U.S. dollar. The U.S. produces 14 million barrels a day.

This will be an interesting pair to watch because if we break above here, then we enter this massive consolidation up to the 1.45 level. While we could get there, I think the easy money, as it were, has already been made.

So, a little overbought condition here. If we get some reason to think that maybe the economy is cooling down a little bit in the U.S., that might be the excuse needed to short the USD/CAD pair. If you're already long in this pair, then you need to be aware of that jobs report causing volatility in the morning.

EURUSD Chart by TradingView

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