USD/CAD Forecast 05/11: Dollar Tests Support (Video)

(MENAFN- Daily Forex) The U.S. dollar continues to see a lot of noise, as it initially fell, perhaps in the vein of seeing Congress friendlier to Canada, but at the end of the day, most of what we have seen has been done via Executive Order.

USD/CAD

The U.S. dollar has fallen pretty significantly against the Canadian dollar as risk jumped in many markets around the world after the elections in the United States.

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The fact that the Democrats took control of Congress, while exciting, really is not something that is going to move the needle as far as some of the actions are concerned militarily in the Middle East, for example. However, in Canada's situation, it could change some things, although it is worth noting that Congress itself can only do so much. A lot of the actions between the United States and Canada have been done via executive order. So, we will see.

Traders are going to get both US and Canadian employment figures on Friday

I think what is happening now during the trading session is traders are looking at the technical analysis. We are currently testing the 61.8% Fibonacci retracement level and the 200-day EMA, as well as an area that was previously resistance and now looks supportive.

EURUSD Chart by TradingView

Ultimately, this candlestick shows that there is at least a little bit of a pushback. But I think the real story here is the fact that traders are going to get both U.S. and Canadian employment figures on Friday. So, between now and then, I actually prefer more sideways action, meaning a short-term bounce

I do not think we take off to the upside drastically, nor do I think we break down. I think we are going to find ourselves somewhere between 1.39 and 1.4025 for the next couple of days. With this being the case, I think you have a situation where short-term traders will continue to go back and forth. But by the end of the day on Friday, we should have quite a bit more clarity.

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