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Forex pairs in this Article » USD/CAD

The USD/CAD pair rose during the session on Thursday as you can see, bouncing off the 1.04 handle an area that has been important time and time again. The Canadian dollar of course is going to be greatly affected by the value of the oil markets, something that is only just now starting to stabilize after a precipitous fall over the last couple of weeks. On the other hand of this question is the US dollar itself. The US dollar of course is affected by a lot of things right now but the Federal Reserve is front and center as far as any decisions are being made.

With the nonfarm payroll number coming out later today, it's very possible that we see a significant move in the US dollar, but this pair will be different. Bad news for America is even worse news for Canada as they send 85% of their exports into the United States. Simply put, what happens is that bad and economic numbers out of America actually spells disaster for the Canadians as they are reliant on the Americans to buy their exports. Think of it this way: owning a store and having all of your customers lose their jobs is an absolute disaster. This is essentially what Canada faces when the United States goes into recession.

Poor jobs numbers are probably expected at this point.

At this point time, the markets are more than likely expecting see poor jobs numbers, and this of course should favor the US dollar in this particular scenario. I do recognize the fact that the 1.05 handle above will have a certain amount of resistance though, and as a result we could have a significantly choppy session during the day today. Above there, I see the 1.06 level is the gateway to the 1.10 level, which of course would be a significant move. This pair does have a long-term history of going sideways for a significant amount of time and then suddenly shooting in one direction or the other, and I see no reason why that's going to change anytime soon. Because of this, I do expect an explosive move and the nonfarm payroll numbers might just be the catalyst for that. However, I suspect that waiting until the close today is probably going to be the safest bet of all.

USDCAD Daily 11813

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