USD/CAD Forecast: USD Pulls Back From Significant Resistance

The US dollar has pulled back a bit during the trading session on Thursday as the 1.31 level against the Canadian dollar continues to cause resistance. If we were to break above there, that would obviously be a very bullish sign for the greenback, and a negative one for the Canadian dollar. That being said, it’s worth paying close attention to the crude oil market, because the Canadian dollar is so highly levered to it.

While the US dollar pulled back, the crude oil markets recovered a bit during the day. However, it’s worth noting that the crude oil market, specifically the West Texas Intermediate Crude Oil market, pulled back from a previous uptrend line, suggesting that we may get a little bit of a pullback. It will also continue to have to pay close attention to the jobs number that is coming out on Friday morning, which will cause a lot of noise in the greenback.

Speaking of the jobs number, it’s worth noting that both countries will produce their jobs number at the same time on Friday morning, so this will be a particularly chaotic pair. Underneath, the 1.2850 level underneath will be supported, as the 50 Day EMA sits right there as well. Ultimately, this is a market that will continue to see a lot of noisy behavior, but if we were to break down below 1.28 at all, then it’s likely that we could go to the 200 Day EMA, possibly even the 1.26 level which is the bottom of the overall of trending channel.

Michael Cooper

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