The USD/CAD pair initially went higher during the course of the session on Tuesday, but found enough resistance near the 1.3150 level to turn things back around and form a bit of a shooting star. The shooting star of course is a very negative sign but I don’t think that we're going to necessarily break down significantly. After all, I see quite a bit of support at the 1.30 level, and of course surrounding that area overall. The 1.30 level is essentially the middle of the massive support region, so at this point in time I’m not necessarily inclined to start selling this pair. In fact, I believe that it is much easier to simply wait for some type of supportive candle to start buying this pair. After all, the market has been in an uptrend for some time, and although the oil markets look a little healthier during the day on Tuesday, the reality is that they are a long way from showing major strength.
Volatility
Remember, Friday is the Nonfarm Payroll Employment numbers out of the United States, and that of course is massively important when it comes to the Forex markets in general. The US dollar of course will be greatly influenced, but also the Canadian dollar is by proxy as the Canadians send 85% of their exports into the United States. Ultimately, this keeps these 2 currencies intertwined, and of course causes quite a bit of volatility in general.
Going forward, if we can break above the top of the shooting star for the Tuesday session, I’d be willing to start buying this market as well. Ultimately, at that point in time the market should then reach towards the 1.33 level, the 1.34 level after that, and of course the 1.35 handle. A break above there just simply continues the longer-term trend move higher. As far as a longer-term move lower, I do not see that being sustained until we get below the 1.25 handle.
