The US dollar initially rallied against the Canadian dollar during the trading session on Thursday, but as you can see gave up gains near the 1.28 handle. This is not a huge surprise considering what has been going on in the oil market, which of course has a major influence on the Canadian dollar itself. That being said, I believe it is probably only a matter of time before we have to make a bigger decision, but Friday itself is going to be very volatile and dangerous due to the fact that both of these countries are going to be announcing jobs figures. On top of that, the announcements come out simultaneously, so at 8:30 AM Eastern Standard Time, you can expect a lot of choppy behavior in this market.
It is worth noting that the 50 day EMA sits just below and that of course will attract a certain amount of attention. Because of this, I think there will be a little bit of “built in support” in the market, so therefore I think we need to pay close attention to the idea of the market continuing to see buyers on dips. However, if we were to turn around and break down below the 200 day EMA, it is very likely that we would see a market break down. The 200 day EMA currently sits at the 1.2625 handle, so that is where we need to pay close attention to.
On the other hand, if we were to turn around and break above the 1.28 handle, then the market is likely to continue to go much higher, perhaps reaching towards the 1.30 level. That obviously is a large, round, psychologically significant figure that a lot of people would be paying attention to, so obviously it would catch a lot of attention. Ultimately, this is a market that I think will continue to see plenty of noisy behavior, but will we really need to pay attention to is what happens after the Friday session. Between now and the end of the Friday session I would not risk trying to get too aggressive in this market due to the fact that there can be a lot of choppy and unacceptable volatility that can cause a lot of unnecessary damage to your account. The markets need to be decisive in order to follow them.
