The USD/CAD pair rose during the session on Thursday, but as you can see struggle that once we get close to the 1.09 handle. The resulting candle is a shooting star, which of course is a very sign and I do believe that this market is ready to pull back. I’m not willing to sell it though, and the fact that the nonfarm payroll number comes out today probably has something to do with this as well. This is been a relatively parabolic market recently, and as a result a pullback would be healthy.
Keep an eye on the oil markets, but if you turn this chart upside down you can see that the WTI Crude Oil market formed a nice-looking hammer just as this chart would have you believe. That being the case, we feel that the oil markets could get a little bit of a bounce during the session, which could push this market down however, the 1.0750 area or perhaps a little bit lower, will more than likely offer enough support and interest by the buyers that the market should get a nice bounce right there. In fact, that is exactly what we are hoping to see in order to take advantage of will we would perceive as value.
Is not until we managed to break down below the 1.06 level that we would even consider to sell this pair, as the Canadian dollar has been so week. Quite frankly, this pullback makes sense and should help build momentum to break out to the upside finally. We still believe that this pair goes the 1.10 level given enough time, but like all markets will go up there in a straight line as no market does.
If the jobs number out of the United States is fairly strong during the session, we could break the top of the shooting star, and at that point in time that would signify that the market is about to go parabolic yet again. This market can do that suddenly, as it does tend to be very sideways for long periods of time followed by massive surges in one direction or the other.
Written by FX Empire