- The US dollar has risen a little bit against the Canadian dollar during the early hours on Friday as we continue to dance around the 200 Day EMA.
- The 1.38 level is an area that seems to be a bit of a magnet for price as well, and therefore I think it’s probably worth noting that the market may stay in this overall range.
- After all, not only do we have the 200 Day EMA sitting here, but we also have the 50 Day EMA sitting below.
All of this being said, this is a pair that is typically choppy, so you have to be very cautious about expecting huge moves. Ultimately, this is a scenario where this pair is quite often transacted during a specific time of the day, during North American hours, and of course there is a lot of necessary facilitation of trade in this currency pair as the United States and Canada do so much cross-border commerce. That being said, we are in a bit of an odd situation as we are in the midst of a tariff spat as well.
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No Deal Still
At this point in time there is still no deal between the United States and Canada, and ultimately, I do think that ends up hurting Canada as Canada gets 25% of its GDP from exports to the United States. With that being said, the market is going to have to take into account the fact that Canada lost 65,000 jobs during the previous month, and therefore despite the fact that there was a poor US jobs number, it’s clear what the divergence is starting to be.
Ultimately, unless there is some type of calming of trade tensions between the 2 countries, I suspect that the Canadian dollar will remain a little suspect going forward. While we are somewhat sideways, I still think we go looking for higher levels eventually.
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