The USD/CAD pair fell during the session on Friday, as the jobs number came out slightly better than anticipated in Canada. The US number was basically where we thought it would be, so it makes sense we get a little bit of Canadian strength during the day. However, the 1.20 level below continues to be a source of support, and with that it’s difficult to imagine that the market will break down easily. Adding to the support is the fact that the 1.20 level has the 200 day exponential moving average just below at which of course keeps longer-term traders interested in buying. Because of this, we believe that it’s probably a market that’s ready to start trying to rally.
The oil markets aren’t helping the Canadian dollar
While the oil markets rallied for a couple of weeks, we have pulled back from the highs and that of course will not help the Canadian dollar. Keep an eye on the oil markets though, as if we pullback and find some type of support, we could see money flowing back into this marketplace. In the meantime though, it just isn’t being much help.
I believe that buying in this general vicinity is probably the best move you can make, simply because the area has been reliable. This isn't a guarantee obviously, but the truth of the matter is that the area has proven itself to be important more than once. Because of this, all you can do is play the averages, which is essentially what I’m telling you to do at this point.
I still like the US dollar in general, so I think that a bounce from here would make a lot of sense. Either way, as long as we can stay above the 200 day exponential moving average and the bottom of the two hammers that are sitting on it, I have no interest in selling until we break down below there. If we do, that would be a very negative sign though.
