The USD/CAD pair rose during the session on Wednesday as we entered the resistance zone going all the way to 0.9950 or so. This cluster should continue to keep the bit of a lid on this currency pair, but it must be said that the oil markets completely fell apart. This is typically poor for the Canadian dollar, and if we managed to get above the 0.9850 level on a daily close, we think this market could return back to the top of the previous consolidation zone which is at the 1.04 handle.
Alternately, we could pullback and this would be more conducive with the overall trend as is pair has been falling for quite some time. We would not hesitate to sell this market under the 0.98 handle, but currently think that with the nonfarm payroll numbers coming out on Friday; this pair will more than likely grind sideways.
Written by FX Empire