The USD/CAD pair rose during the session on Friday, breaking above the 1.0450 handle at the close. This is a continuation of the move that smash through the resistance at the 1.04 level, showing that the market is in fact ready to breakout towards 1.05 level, and then possibly as high as 1.06 level. If we can get above the 1.06 level, I firmly believe that we will eventually hit the 1.10 level as it is the next significant resistance on the longer-term charts.
This pair does have a long history of going sideways for a while and then suddenly moving rapidly in one direction or the other. I think this is kind of what we are seeing right now, and therefore the continued bullishness would not surprise me. However, if we get a little bit of resistance of the 1.05 level that causes this market to pull back, I would not hesitate to buy a supportive candle either.
Nonfarm payroll numbers will continue to move this market
I believe that the weak US jobs numbers will continue to influence this currency pair. After all, Canada sends 85% of its exports down to the United States, and if that's the case, you need to have jobs for the customers. If there's nobody working in the US, or at least not as many people it should be, there aren't going to be many orders for Canadian goods, thereby driving down the demand for the Canadian dollar. Because of that, I feel that the market will continue to rise over time, and could possibly breakout above the 1.06 level in order to make that larger move.
As far as shorting is concerned, I am not that interested in doing so at the moment, because I think there is so much noise below. Also, there would be easier ways to play the Canadian dollar if the oil markets pick up for example. You could either buy oil, or perhaps by the Canadian dollar and sell the Japanese yen at the same time. Either way, the US dollar is probably going to be a bit tough against the Canadian dollar for the short-term.