The USD/CAD pair rose during the session on Thursday, as you can see, breaking above the 1.05 handle. This course is somewhat significant, as it is the top of the recent consolidation range, but I do believe that we need to break the top of the Thursday range in order to show significant pressure to the upside that is sustainable. If we can get above the 1.05 handle, and the highs of the session from Thursday, I believe that the next stop will be the 1.06 handle. Above there, things get truly interesting as it seems to me that there is quite a bit of "empty space" between 1.06, and the 1.10 levels. In other words, we could see a very impulsive move higher in this market.
As for selling is concerned, it's almost impossible to imagine doing so as this market has continued to grind higher despite any issues with overhead resistance. I think any pullback at this point time will simply be a buying opportunity, as the consolidation should continue, which means you should be a ton of support down near the 1.04 handle. Any supportive candle in that general area is an invitation to start buying, but quite frankly I don't know that were going to get down there this time.
Oil markets, and jobs numbers.
The oil markets always have to be monitored when talking about the Canadian dollar, and this course is going to be any different now. After all, Canada is a highly export driven economy, and oil is one of its major exports to the United States. Going forward, I suspect that jobs numbers will mean more than anything else, and the lower than anticipated first-time claims number out of the United States signifies that perhaps the labor market is getting better in America.
A better American labor market of course means of the Federal Reserve can't taper off of quantitative easing, so that's why the jobs numbers will be so important. Going forward, it is going to be interesting to see how this pair behaves, but I think we are going to see continued upside potential.
