The USD/CAD pair rose during the session on Wednesday, slamming into the 1.04 handle. This level course is resistance, and if you been following my analysis you know that I think this is a hurdle that has to be overcome in order for the US dollar to continue to appreciate against the Canadian dollar. That being the case, I found it very interesting that this session ended with us pulling back slightly from the 1.04 handle, but the fact that we did race towards it and The most of the gains suggests to me that we will eventually break through and higher.
In order to become truly bullish though, we need to at least clear the highs of the session from Wednesday, and at that point time it would not surprise me at all to see this market race towards the 1.05 handle. Remember, the nonfarm payroll numbers did not come out last week, in this pair is particularly sensitive to that announcement. Perhaps there is a little bit of speculation ahead, but it should be noted that the Canadian dollar of course is tied to oil as well, so therefore there a lot of crosscurrents at any given moment in this market.
Employment numbers
As soon as the employment numbers get out, it's more than likely that this pair will make a strong move in one direction or the other. At this point in time, I have to admit that I think that the upside is probably the most likely move, and as a result I think we will see 1.05 in the very short-term. If we can get above 1.05 and better yet above 1.06, I feel that this market could really start to move, perhaps heading towards 1.10 level.
On the other hand, if we do see a resistive candle near the 1.04 handle, I think that would be an excellent place to start selling on the right signal. The question is whether or not we can get a shooting star, which for me would be absolutely ideal to start selling. That would be a short-term move though, as I think the 1.03 level will be supportive as well.
