- The US dollar has rallied slightly during the session here in early Tuesday trading against the Canadian dollar to jump slightly above the 1.38 level, but it is facing a little bit of pressure in this region.
- It’ll be interesting to see how this plays out because on Friday we will get the Canadian employment numbers and that will have a major influence as to where we go next.
- That being said, if we can break above the candlestick from the Friday session, where we pulled back viciously from the 200 day EMA, that would obviously be a very bullish turn of events because not only are you taking out a very negative candlestick, but you’re also jumping above the 200 day EMA, which a lot of traders pay close attention to.
Next Few Days Important
Between now and Friday, we may have a bit of a range form as we are between the 50 day EMA underneath and the 200 day EMA above. Keep in mind that there is a lot of uncertainty when it comes to this currency pair, mainly due to the fact that the United States and Canada still do not have any trade agreement. And therefore, this is a bit different than perhaps the pound against US dollar, the euro against the US dollar, etc.
So, with all of that being said, it’ll be interesting to see how Canadian employment is faring and whether or not there is something to worry about there. Again, though, we had recently been consolidating in this pair.
And I think ultimately, we are in a situation where traders are trying to break out of there, we pulled back. Now the question is, will the retest produce support? I suspect we should have our answer in the next day or two, Friday at the latest, and then we should have a bigger move. Again, anything over the 200-day EMA suddenly looks very bullish.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.