The US dollar initially tried to rally against the Canadian dollar again on Thursday, but found the 1.30 level to be a bit too strenuous to overcome. Because of this, we drove down to the 1.2930 level, an area that has offered support. If we can break down below the 1.29 level, that should send this market much lower. This will be an interesting session for this currency pair, because we get the Nonfarm Payroll Numbers coming out of the niceties, but simultaneously we also get the Canadian Employment figures. With this being the case, the market will be very volatile and could essentially be the epicenter of most Forex trading later in the day today.
The alternate scenario…
The alternate scenario for me as if we can break above the 1.3050 level, then I would be a buyer as I think the market would probably go looking for the 1.32 handle. We also have the crude oil situation, which of course is bearish overall so I think that it’s only a matter of time before we could get some upward pressure. Recently, we have been seeing a massive bond trade favoring Canadian bonds over US bonds, so that has had a bit of an effect on this currency pair. Short-term it looks as if the trend will probably favor the downside, but quite frankly if there’s any trading session that can change the direction and momentum of this currency pair, it’s going to be today. Those employment figures will be vital for this pair, as we should continue to bounce around but given enough time I think that the market will make a longer-term move. This being the case, it’s likely that the market will be dangerous, but once we get an impulsive move, I think it’s time to start adding once the trade is in our favor.
Written by FX Empire