Daily Forex Reports | by FX Empire | Friday, 10 July 2015 06:41 UTC
The USD/CAD pair initially fell during the session on Thursday, but found enough support near the 1.2650 level to turn things back around and form a hammer. This hammer is at the recent highs, and as a result we think that the market is trying to build up enough momentum to break out to the upside and above the 1.28 handle. Keep in mind that Canadian Employment numbers come out during the session today, so that of course can move this market. If the employment numbers are horrible, this market should go straight up. Keep in mind that the oil markets can have an influence on the Canadian dollar as well, but quite frankly at the moment they aren’t exactly strong. We believe pullbacks offer value in this market, and will continue to buy them as we move along.
If we can get above the 1.28 level, we feel that this market will probably head to the next natural barrier, the 1.30 level. This was the absolute height of this market during the financial crisis, see you can expect a lot of volatility near that level. However, we think that the market may eventually break out above there, and that will be especially true if the oil markets continue to fall. Right now they look like they are trying to stabilize a little bit though, so that correlation may back off at least in the short-term.
We believe that there’s a bit of a “floor” in this market at the 1.25 level, so we are willing to buy pullbacks all the way down to that region at the very least. Quite frankly, we don’t necessarily have a scenario in which we are willing to sell at the moment, but we do recognize that this market tends to be very volatile and sideways driven as the 2 economies are so intertwined. That being the case, you’re going to have to be very patient when trading this currency pair, but that’s not any different than any other time when it comes to dealing with the US dollar against the Canadian dollar.
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