The USD/CAD pair initially tried to fall a little bit during the session on Thursday, but found enough support at the 1.11 level to turn things back around and have a positive day. However, the market has to deal with the Canadian Employment numbers during the session today, so it’s very likely that we will see a bit of volatility. With that, I feel that the market could offer value on a pullback as it will more than likely be a knee-jerk reaction. That would be to stronger than anticipated Canadian employment numbers, but there are plenty of reasons to believe that the US dollar will continue to strengthen overall.
Ultimately, I believe that this market will break out to the upside, and that every time it pulls back it does offer value as a US dollars without a doubt the most favored currency in the markets are now. I also believe that the markets will eventually go to the 1.15 handle, given enough time and that it will be a “buy on the dips” type of strategy for most traders out there.
Oil markets aren’t helping
The oil markets continue to come undone, and that certainly isn’t helping as the Canadian dollar is highly sensitive to that particular commodity. With that, I believe that as long as the oil markets aren’t offering any reason to own the Canadian dollar, I simply won’t bother doing it. I think that this market continues to be choppy as it normally is, after all - the two economies are completely interconnected.
With that, I believe that we continue to have a nice one-way trade, although you have to look at this particular pair from a longer-term perspective, as the micro movements tend to be rather choppy and volatile. I think that the uptrend will continue for the foreseeable future, so I have no plans whatsoever in selling this pair and I think that it will offer value every time it falls. The Canadian dollar of course will do better than most other currencies around the world simply because it is a North American currency, but against the US dollar, I think it continues to struggle.
