The USD/CAD pair fell during the bulk of the session on Thursday, as we continue to consolidate just above the 1.24 handle. Because of that, it appears that the market will continue to consolidate as we await the employment numbers out of both the United States and Canada. Quite frankly, we are in an uptrend overall, so even if we fell from here we would be looking for buying opportunities. Any supportive candle in this area should be an opportunity to go long, just as a break above the top of the range would being. We have no interest in selling as the uptrend has been so strong, and quite frankly the oil markets are going to continue to work against the value the Canadian dollar for the foreseeable future.
Truthfully, it’s not until we break down below the 1.18 handle that we would even consider selling this pair as that is a significant support “zone” in this pair and we think that it’s probably going to continue to keep the market somewhat afloat. On the other hand, if we break above the top of the range we think the market should go to at least the 1.28 handle, and ultimately the 1.30 handle.
The 1.30 handle has been very resistive in the past, and that is where we believe that the real fight is going to occur now. If we get above there, it will almost undoubtedly spell certain doom for the Canadian dollars far as value is concerned. That would be an absolutely massive breakout, and as a result it would create a longer-term buy-and-hold type of mentality in this pair. However, we have no idea whether or not that will happen but in the meantime it does look like we are going to try to get there and test that area.
Any type of supportive action at this point in time is reason enough for us to start buying as the market has been such an easy move lately. Keep an eye on the oil markets, they of course will have a pretty significant effect on how this goes.