The US dollar shot higher against the Canadian dollar initially during the trading session on Friday, but rolled over to reach towards the 1.2550 level as the jobs number is favored Canada. However, American job numbers were of course skewed due to the pair of hurricanes last month, so I think that at the end of the day, traders are writing off the US jobs losses as a bit of an anomaly, and most certainly short term. The 1.25 level underneath should offer support, and I think it’s only a matter of time before the buyers get involved again. If we can break down and above the 1.26 level, the market should continue to go even higher. If we were to do that, then I think the targets probably going to be the 1.30 level, as it is a large, round, psychologically significant number.
We had recently broken down below an uptrend line, and the fact that we did suggests that there would be a major change of trend, but we broke back above it, so it looks likely that we are going to continue to see the overall uptrend. The market should continue to see buyers on dips from what I can see, and I believe that the oil markets falling apart certainly won’t help the Canadian dollar either. The treasury markets in America are starting to see higher interest rates, and that should continue to be reason enough for this market to go higher as the bond trade favoring Canada seems to be unwinding. With this in mind, I believe that the market continues to go higher. If we were to break down below the 1.2450 level, then I think the market would sell off rather rapidly and reach towards the 1.20 level underneath.
Written by FX Empire