The USD/CAD pair fell during the session on Tuesday, but as you can see found the 1.10 level to be supportive enough to keep the market somewhat afloat. I still believe that the nonfarm payroll number is what this market is waiting on, so really doesn’t surprise me to see that it isn’t ready to do anything quite yet. With that announcement been so close, it’s hard to imagine that a lot of people want to jump in with both feet and start risking serious amounts of money in this pair, as it has been so sensitive to the nonfarm payroll number over the long-term.
The shape of the candle does suggest that perhaps we will continue to see buyers step into this market has although it is and quite a hammer, it is close and often means roughly the same thing. This would be the third day in a row that we have seen this, and as a result I feel fairly confident that the 1.10 level is going to continue to offer support going forward.
Holding pattern.
I believe that the market is essentially in a “holding pattern”, and as a result it’s difficult to get to overly excited about it. However, I would be a buyer and not a seller, simply because we have been consolidating in this general vicinity for some time now, and I recognize that the 1.09 level is supportive as well, so essentially we have a 100 PIP area of support just below us. On top of that, the market is trying to head towards the top of the consolidation area again in my estimation, which is at roughly 1.12 or so. That gives us plenty of room to the upside in order to continue to trade this market.
All things being equal, I believe that a break of the highs from both the Monday and Tuesday session does signify a buying opportunity, but I also recognize that there’s probably going to be a bit of choppiness between now and the end of the day on Friday, as markets anticipate the vital jobs number.
