- The Canadian Dollar initially rallied during the trading session on Tuesday, to reach toward the 0.5875 Level, an area that has been resistance a few times before.
- The fact that we turned around and formed a bit of a shooting star is not a huge surprise, as the Bank of Canada has an interest rate decision coming out on Wednesday.
- This is going to be a very volatile day for the Canadian dollar, but I’ll be watching to see if we can break above the 50 Day EMA, which is sitting just below the 0.59 level.
Downtrend
Top Regulated Brokers
The downtrend is still very much intact, but the last 6 weeks or so has been somewhat sideways, and I do think that we have a situation where the 0.58 level is a massive floor, and an area that I think if we were to break down below it, things could fall apart. Anything below that level is going to kick off pretty significant selling, as the “trapdoor” could come flying open. Ultimately, this is a market that I think will continue to be interesting to watch as the Canadian dollar is considered to be a “risk on currency”, while the Swiss franc is considered to be a “safety currency.”
I would point out that if we do in fact break above the 50 Day EMA, despite the fact that it is a very bullish turn of events, we are still “swimming upstream” at that point, and it would take quite a bit of momentum to turn things around. However, if we were to break above the 0.6050 level, then we could have an entire trend change. The Canadian dollar is a bit of an outlier at the moment, because unlike the other major currencies around the world, there is no trade deal with the Americans and Canada is very reliant on the United States as over 20% of its GDP comes from its exports to that country alone. It is because of this that I prefer to sell the Canadian dollar, but there is a trade set up that’s worth watching here.
Ready to trade our daily forex forecast? Here are the best online trading platforms in Switzerland to choose from.