Greenback climbs against Loonie on Thursday

The US dollar initially showed softness against the Canadian dollar on Thursday but found enough support near the 1.2825 level to bounce and rally again. We have been consolidating for several days now, which makes a lot of sense, because the 1.30 level above is going to be resistance. It’s going to take several attempts a break above there, but once we do that should free the market to go much higher. I anticipate that there will be a lot of noise along the way, but with the jobs number coming out today, it’s likely that we will get the momentum necessary to either breakout or go lower and look for more support.

I recognize the 1.2750 level as major support, and of course the 1.25 level after that. Overall, I do like buying this market, but I also like buying short-term dips to take advantage of better pricing. After the jobs figure comes out for the day, that should signify whether there is a strong likelihood of interest rates going higher in the United States again. Once we break above the 1.30 level, I think we go looking towards the 1.3250 level, perhaps even higher than that.

If we break down during the day due to a negative announcement, that will send this market scurrying much lower to look for support. However, I think that eventually the value hunters will come back, so if the jobs number is very poor, I’m going to stand aside and let the market tell me when it’s safe to start buying again.