In the USD/CAD pair rose slightly during the session on Monday, showing that the 1.03 level should continue to be supportive. That being the case, I feel that this market is going to bounce towards the 1.04 handle, but we have to keep in mind that the nonfarm payroll numbers come out today, and this market does tend to be very sensitive to it. It makes perfect sense if you think about it, as the Canadians send 85% of their exports into the United States, which of course needs to be employed in order to buy those Canadian goods.
If the jobs number comes out rather soft, this is actually going to be pro-dollar, and anti-Canada in this particular currency pair. It's a little bit counterintuitive at first, unless of course you think of it as a store that is losing customers due to high unemployment. Essentially what you have in this particular marketplace under those particular circumstances.
On the other hand….
On the other hand, if we do get a strong jobs number that should have absolutely pummeled the US dollar in this particular market, we would dive well below the 1.0250 level, an area that I feel is massively supportive. If that happens, I see no reason why we will head down towards the parity level eventually. That being the case, I think that waiting for the daily close might be the way to go on a short trade, but as far as going long is concerned I feel that it makes sense to go ahead and go long on a significant move via the shorter-term charts, simply because it would just be a continuation of the consolidation that we've seen recently.
With that in mind, I'm actually a little bit more comfortable going long of this market in short, especially considering that I do not expect to see good jobs numbers coming out of America at this point in time. However, we have to recognize the fact that anything can happen so it makes sense to simply wait until that number comes out before getting involved. If we can break above the 1.04 level, I think this market could truly breakout to the upside.
