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MENAFN- Daily Forex) Potential signal:
I am a buyer at 1.4010, with a stop at 1.39, and a target of 1.4350 above.
As you can see, the US dollar has rallied rather significantly during the course of the trading session on Friday, and probably got a little bit of a boost due to the fact that the Canadian employment numbers were weaker than anticipated. So, this is a turnaround and strengthening of the greenback that makes a bit of sense for the session.
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That being said, the US dollar has been rallying for some time, and therefore I think this is just a simple repudiation of the selling pressure from the previous session. Keep in mind that interest rates in America continue to climb in the bond market, despite the fact that the Federal Reserve has done everything it can to cut rates and keep them down. The US dollar will continue to strengthen based upon what traders have to say in the bond market, so watch those yields.
Short-term pullback should see plenty of support near the 1.38 level, which of course is an area where we've seen action in both directions previously. I think each time the USD/CAD market pulls back, we are just simply waiting to try to build up enough momentum to finally break above the 1.40 level a Move Higher
[graph_5758]
Anything above the 1.40 level will almost certainly send the US dollar much higher and it could very well show the US dollar strengthening against most currencies not just the Canadian dollar. Beyond that you also have to keep in mind that the oil market is relatively soft and that has a knock-on effect on the greenback and the Canadian dollar both. So, with all of that being said, I like this pair to the upside, but I recognize we have a lot of work to do to finally break out. If and when we do, this could be a massive move just waiting to happen, but we need some kind of serious catalyst at the moment.
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