USD/CAD Forecast 10/11: Dollar Strength Builds (Video)

(MENAFN- Daily Forex) The U.S. dollar initially fell on Monday but then turned around to show a lot of strength. At this point, the market is pricing in the difference between the U.S. and Canadian employment announcements, which are moving in different directions.

USD/CAD

The U.S. dollar initially pulled back just a touch during the early part of the Monday session, but we have turned around to show signs of strength. The market dropping the way it did and then turning around to show signs of strength is a good sign.

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After all, this is a market that is still reacting to the employment situation in the United States and Canada, which are moving in two different directions. The 50-day EMA underneath, I think, offers support near the 1.4055 level, and the 1.4250 level above could be a target.

The interest rate differential continues to favor the United States

It is worth noting that the momentum from Friday seems to be accelerating again. As a result, I have no interest in shorting this pair. Furthermore, the interest rate differential continues to favor the United States, and it is likely that the Federal Reserve will have to hike rates in December, with the Fed Tool suggesting a roughly 90% probability.

EURUSD Chart by TradingView

So, even though the Bank of Canada raised rates, the reality is we go right back to where we were several months ago, and I think that will be the scenario here. I have no interest in shorting this pair. I have no interest whatsoever in shorting this pair and paying the swap

If I wanted to short the U.S. dollar, I would probably do it against the British pound. So, all things being equal, I like this pair to the upside, and I think it is probably only a matter of time before we test that recent high yet again.

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