USD/CAD Forecast December 2, 2016, Technical Analysis

The USD/CAD pair broke down during the day on Thursday as oil markets rallied yet again. Breaking the bottom of the hammer from the previous session of course is a very negative sign but I think there is plenty of support between here and the 1.32 level below. Ultimately, if we fall from here it’s likely that a bounce gives us an opportunity to pick up a bit of value. What will be interesting today is the fact that we have the Nonfarm Payroll Numbers coming out of the United States, which of course is a major mover of the US dollar going forward. However, on the other side of the coin we have the Canadian employment numbers, and that of course can give me an opportunity to take advantage of the dichotomy of the 2 economies.
With this in mind, it be interesting to see whether or not we get some type of massive mess on either side of the border in order to take advantage. The Canadians are expected to lose 20,000 jobs during the month of November, so if the number comes in much lower than that, I think this pair will turn around completely. That also would be helped if the oil markets pullback at the same time. I don’t have any interest in selling quite yet, because I see so much in the way of support all the way down again to the 1.32 level at the very least. There’s a lot of noise to come below, so it’s difficult to be comfortable selling. We are still within the up trending channel, and with that I think it makes sense that we continue to go higher over the longer term.
Given enough time, the market should then reach towards the 1.40 level above, which I think is a very interesting level on longer-term charts. Tomorrow could give us plenty of momentum in one direction or the other, but right now I think the easier route is to the upside. With this, I remain bullish but I need some type of bounce or supportive candle in order to start putting money to work.