Filed Under:
Forex pairs in this Article » USD/CAD
By: DailyForex.com

The USD/CAD pair had a pretty volatile session on Thursday, but you have to keep in mind that the pair is mainly traded between American and Canadian traders at best, so obviously most of the volume is done in North America. Thursday was the Independence Day holiday in the United States, so that of course made the markets essentially closed.

As today's nonfarm payroll, this pair is one that's often overlooked. However, I have found that it is without a doubt the most interesting one 90% of the time. This is because the two economies are so intertwined, that good or bad economic numbers of the United States move both currencies. Both are very, very sensitive to the employment situation in America simply because the Canadian send 85% of their exports into that country. Oddly enough, a good employment number on the United States normally helps Canada more than the United States itself!


USD/CAD Chart July 5

However, there are Canadian numbers tomorrow as well.

The Canadian employment numbers come out tomorrow as well, and at the same time. In other words, there is going to be a lot of moving parts in this pair, and as a result of volatility should be extreme. However, when I look at this chart I can see the 1.04 level as being very supportive, and as long as we stay above that level I am more interested in buying then selling.


Eventually, I do think that we will break higher and hit the 1.08 handle, and possibly the 1.10 level. It isn't until we break down below the 1.03 handle that I feel selling this pair is possible, and because of that I am essentially in a "buy only" mode at the moment when it comes this marketplace. Also, you have to pay attention to what's going on in the oil markets, as that can greatly influence the strength of the Canadian dollar in general. However, it is interesting to note that this pair continues to grind higher while oil markets have actually broken out to the upside quite drastically due to political problems in Egypt. The fact that the market did not break down in favor of the Canadian dollar in that circumstance tells me that this market will eventually be going higher.


comments powered by Disqus
Trading Center