The USD/CAD pair rose during the course of the session on Friday, breaking to a fresh new high at one point during the session. Because of this, I think that we are starting to see that the uptrend is going to continue, which is something that I have thought all along. The fact that we have this bullish candle on Friday was exacerbated by the fact that the jobs number out of America was so strong. Because of this, I think that the US dollar is strengthening around the world, and of course Canada isn’t going to be any different.
Oil markets certainly are not helping the Canadian dollar right now, as they look like they are softening up. Given enough time, I think that we not only go higher in this market, but I think we test the 1.35 level. That is an area that will cause quite a bit of resistance obviously based upon the fact that it is a large, round, psychologically significant number, but given enough time I think we will break above there.
General US dollar bullishness
I believe that the general US dollar bullishness continues, and that of course will have a bit of an effect on this market as well. Keep in mind that people tend to either buy or sell the US dollar in terms of their thinking when it comes to Forex, so generally it all moves in one direction. On top of that, we have the oil markets that are a bit of an anchor round the neck hold the Canadian dollar, so that should keep this market going higher over the longer term.
I do recognize that there will be quite a bit of volatility, but at the end of the day this market tends to be choppy in general. The two economies are so intertwined that it’s almost automatic at this point. It doesn’t matter though, if you’re used to trading the USD/CAD pair, you recognize that it is nothing out of the ordinary for this market to chop around on its way up.
