- The US dollar initially pulled back just a bit against the Canadian dollar during the trading session on Tuesday but then turned around to show signs of life again.
- The market broke above the 1.45 level and then promptly turned around.
- The 1.45 level is an area that a lot of people need to pay close attention to, mainly due to the fact that it has been a major high in this currency pair multiple times, going back several years.
- It's also worth noting that recently we had seen the market jump above here, but that was all about the tariffs being levied on Canada and Mexico before they weren’t.
So, with that being said, I think you've got a situation where we will probably continue to see a little bit of a ceiling at the 1.45 level, but at this point, it certainly looks like the United States will most certainly be throwing tariffs on the Canadians unless something changes drastically.
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Short Term Pullbacks
Short-term pullbacks at this point in time should end up being buying opportunities, with the 1.43 level underneath offering a bit of a floor, especially now that the 50-day EMA is racing towards there. Underneath there, we also have support at the 1.42 level. So really what I'm doing at this point is letting the market come back to me a bit, and then I'll buy it again on a dip.
If we did get a large candlestick that breaks above the 1.45 level and closes above there, I think that might be a sign of something pretty big about to happen. That will almost certainly be something that you recognize right away, perhaps tariffs being levied, that type of thing. But at this point, I think it's more buy on the dip, and it’s more or less a short-term trader’s market because it’s so news-driven at this point.
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