The USD/CAD pair initially tried to rally during the course of the day on Thursday, but turned right back around to crash into the 1.30 handle. However, this is going to be a monumental day for this particular pair on several different fronts at this point in time. We get the Nonfarm Payroll Numbers coming out of the United States, which of course moves the US dollar in general. With this being the case, I would expect the US dollar to move against several different currencies around the world, but the Canadian dollar is going to be especially interesting during the day, because we get Canadian employment numbers as well.
Another driver of this market of course is the crude oil market, so pay attention when WTI Crude Oil does. If we continue to see bearish pressure in that market, it should turn this market around and send it much higher. I can also make an argument for an up trending channel in this market, which offers support just below the 1.30 level as well. In short, this is a market that is very important at the moment, and right for some type of significant move.
If we broke down below the 1.28 handle, I would believe that the market would break down significantly. However, do not be surprise at all if we see some type of knee-jerk reaction to the downside with a snapback rally next, offering a buying opportunity. At this point in time, I tend to lean to the upside, but of course today is going to be important enough that a lot of traders have probably closed long positions of the last couple of days. Because of this, I think that this will probably be the most important Forex pair to pay attention to during the day on Friday, as it is by far the pair with the most news coming out that could affect interest rates going forward. At this point, I still believe that volatility will be the course of the day, but at this level that we find yourselves, it’s very likely that the market will continue to grind higher.