- The U S dollar has been back and forth during the trading session here on Monday against the Canadian dollar.
- As we are looking at a market that is sitting just above the 50 day EMA, which in and of itself is hanging around the 1.3742 level.
- We are between the 50 day EMA and the 200 day EMA indicators and sitting right around the 1.38 level.
The 1.38 level is a major level of interest in this market, going back multiple months. So, I think we're in an area of major decision. This is an interesting place and an interesting market because we have a situation where the Canadians are now starting to get slapped with more tariffs and it's possible that we have a situation where the US dollar outperforms against the Canadian dollar in relation to other markets. But having said that, we're also seeing strong currencies such as the British pound give up some gains against the US dollar during the day.
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Canadian Dollar Could be a Victim
And if that's going to be the case, the Canadian dollar is almost certainly going to get hammered. If we can break above the 200 day EMA currently sitting just below the 1.39 level, that could open up a much longer term bullish run on a breakdown below the 1.3550 level. Then it could kick off quite a bit of selling pressure.
We are sitting just above a consolidation area and have broken out. Now it looks like we're pulling back to retest it. The question is, will we bounce? The next day or two could be a big driver of where we go next. And do keep in mind that Friday is the employment numbers coming out of Canada. That almost certainly will have a major influence.
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