- The US dollar has fallen a bit against the Canadian dollar during the trading session on Monday, as we have seen US dollar weakness across the board.
- Because of this, it suggests that perhaps we are trying to continue the overall malaise in the US dollar that we saw for several months, but you can also make the argument that quite frankly, we are just sitting in the middle of summer, and there isn’t a lot of interest or perhaps more importantly, volume in the markets overall.
- In fact, if you look at centralized exchanges, there’s a strong argument to be made for that exact fact.
Consolidation
The market has been consolidating between the 1.38 level at the top, with the 1.3550 level offering significant support. Ultimately, this is a market that should continue to stay in this range unless something drastic happens, but this might be a pair where you see that, considering that the United States and Canada have been no trading agreement at the moment, and things seem to only be getting worse between the 2 countries as one would have thought the United States and Canada would’ve wrapped up an agreement almost immediately.
The 50 Day EMA sits near the 1.3750 level and is dropping. The market continues to see a lot of volatility and choppiness, but quite frankly that’s not a huge surprise considering that this pair is almost always somewhat sideways. After all, there is a lot of cross-border transactions between these 2 countries, so a lot of what you see on the Forex chart is actually necessary trading, not necessarily just speculating.
Interest rates continue to favor the United States, so I am looking for a buying opportunity, but quite frankly just unseat setting up at the moment. Ultimately, this is a market that’s going sideways, but if we can ever break above the 1.38 level, then this market could take off.
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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.