By: DallyForex.com
The USD/CAD pair continued to rise in value on Thursday, and even managed to break above the 1.03 level that has been so resistive over the last week or so. The area is a significant resistance zone, so this move should signal more gains to come.
However, the Non-Farm Payroll numbers come out during the session today, and this pair is one that tends to react in a strong manner to this number. The Canadian economy is highly sensitive to the economy in America, and because of this it needs a strong America to thrive. The Canadians send over 80% of their exports to the US, so the job market in the States means a lot to Canada as it is the greatest factor in the economic health of its customer base.
The oil markets are being absolutely pummeled at the moment, and this should continue to weigh upon the Canadian dollar. The pair will continue to rise as the oil markets fall. It is obvious on the Light Sweet Crude charts that there is no real support in the immediate area, and this suggests that the Loonie will continue to suffer in the meantime.
1.03 gives way
The 1.03 level giving way is a significant event as it shows a real shift in momentum. Yes, the pair has been rising, but the fact is that the breaking out is a shift of the momentum to high gear and it shows a real follow through. The continued pressure in this pair could see levels as high as 1.10 before it is all said and done, although this certainly won’t happen overnight.
.png "USDCAD Daily 6112")
It should be noted however, that this pair can move suddenly and drastically. The pair has a long history of grinding sideways only to sudden make extreme moves. The biggest culprit in this anomaly is often the Non-Farm Payroll numbers. Because of this, we could see a strong move higher if the number is weak today. On a strong number, the pair could fall, but I will be looking for support from which to buy in the 1.01 to parity support zone.