The USD/CAD pair did something rather bullish during the Thursday session: it broke above the top of the most recent shooting star. This often leads to more bullishness, and in turn an extension of the rally. This rally has been relatively strong, but we have been sideways for a couple of sessions now. I actually believed that we were going to pull back to the 1.01 handle in order to retest it for support.
However, you can see that we have not done that yet and it doesn't look like were going to anytime soon. Typically, a more conservative way to trade a breakout like we saw back there at 1.01 is to wait for the market to come back to that level and prove it to be supportive. With that in mind, this is the trade that I would love to see but it isn't the one that I'm getting.
One thing that I cannot help but notice is that the Canadian dollar looks much like the other "commodity dollars." They all look horrible at the moment, and it appears that the US dollar is about to make a significant move against most commodities and the currencies that tend to back them up. This doesn't look any different in Canada, and it should be noted that the central bank in that country has recently stated that it was going to have to keep monetary policy looser than originally thought and for longer.
1.04
I have had a target of 1.04 in this pair since we broke out above the 1.01 handle, and there is nothing on this chart that makes me think that won't happen. In fact, it's probably going to happen sooner rather than later, and as a result a break of the highs from the session on Thursday would be enough to fire off another buy signal.
As for selling, I see no possibility of doing so at this point in time, but do recognize that the 1.04 level should offer enough resistance in order to create a pullback. This is because of its significance of the longer-term charts, which of course always override the shorter-term.