- During the trading session on Monday, we saw the US dollar get hammered against the Canadian dollar, although it’s very important to understand that we are still very much in the same region that we had been in previously.
- After all, the market continues to look very sideways at this moment, and I do think you have to understand that the tariff situation between the United States and Canada will continue to keep this market somewhat nervous.
Looking forward, I think this is a market that is still trying to find some type of range, but the US dollar is struggling a bit against most currencies, so I think there’s a little bit of a “knock on effect” in this currency pair at the moment. With that, I think you have to understand that the pair has been very bullish for a long time, and until something fundamentally changes between these two countries, it is very difficult to get overly bullish on the Canadian dollar. Granted, the Canadian dollar is oversold by most metrics that she used to measure it, but I also recognize that the market is one that will remain very choppy and based on the latest words coming from either Ottawa or DC.
Expect Volatility
I think you have to expect significant volatility at this point, as the sheriff talks will continue to cause a lot of headaches for traders. However, I also recognize that this is a situation that has seen quite a bit of drama, and that drama more likely than not will eventually fade away. After all, it’s difficult to imagine a situation where the United States and Canada refused to work with each other over the longer term.
Ultimately, Canada sends almost 80% of its exports into the United States, which means that it’s hard to imagine what would happen to the Canadian economy without the United States, so therefore sooner or later cooler heads will almost certainly prevail. The question of course is how much drama will we get between now and then?
Ready to trade our Forex USD/CAD predictions? Here are the best Canadian online brokers to start trading with.