The USD/CAD pair fell during the session on Wednesday in order to come back towards the 1.04 handle again. That being the case, looks like the markets ready to continue consolidating sideways, and as a result I don't see much in the way of a longer-term trade here. However, if you're willing to trade the short term charts, there is the possibility that you could pick up 20 or 30 pips during the session. After all, we are getting close to the end of the week which of course has the nonfarm payroll numbers, and this pair tends to be greatly influenced by it.
These two economies are so interconnected it doesn't surprise me at all that they would sit still between now and nonfarm payroll numbers, and as a result I think this relatively tight range will continue to be the reality for the market. At best, I don't see this market going higher than 1.05 in the near-term.
The best part of course is that there is a dead obvious support zone.
The 1.04 level has been such obvious support lately that I find this to be a bit of a "no-brainer" trade. After all, a symbol bounce from here of 30 or 40 pips would be much to ask, and the short-term trader as well as the smalltime trader can benefit from this type of action. The market dying out like this is actually quite profitable for traders out there who have smaller accounts, simply because they can get in and out of the market without too many issues.
Even if we did managed to break down below the 1.04 handle, I find it almost impossible to think that we could pick up any kind of traction to the downside because of all the noise below. On top of that, you would expect to see the Canadian dollar appreciate in reaction to good economic news, something that I do not anticipate happening between now and Friday. Because of this, stick to the short term charts and collect a few pips here and there for the next two sessions.
