The US dollar continues to grind sideways against the Canadian dollar as we have seen over the last couple of days. I believe that the market breaking down in WTI Crude suggests that the market will eventually go higher.

I believe that the 1.37 level underneath is supportive, so pullback should continue to be buying opportunities. Ultimately, this market should offer opportunity to short-term pullbacks and I also believe that the day will be interesting as the US releases jobs numbers for April, but so do the Canadians. Because of that, it’s likely that we will see a lot of action in this pair, as we not only have the negative pressure on oil driving the value of this pair higher, but if the jobs numbers work out the right way, that could send this market even higher than that.

1.36 and its importance

Breaking above the 1.36 level has been important, and I believe that it send the market looking for the next psychologically important figure, the 1.40 handle. Given enough time, I think we will reach there and the last couple of days being so quiet suggests that the traders are waiting for the employment numbers to confirm the move. Having said that, the WTI (USO, quote) market has broken down, and that means that there should continue to see an upward trend in this market. I believe that the 1.36 level underneath is massively supportive, and of course could be considered the “floor” in the market. The moving average is on the chart have been very supportive, and it makes sense that the buyers will continue to be attracted to this type of market. The announcements come out at 8:30 AM New York time, I suspect that we will see a lot of volatility after that.

Editor’s Note: Equity investors/traders can use the CurrencyShares Canadian Dollar Trust (FXC, quote) ETF to take positions in the euro without a FOREX account.  The ETF looks to track the price of the Canadian Dollar (USDCAD), minus ETF fee. The fund seeks to reflect the price of the Canadian Dollar with the shares representing a cost-effective investment relative to investing in the FOREX market.

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