USD/CAD has been consolidating since the end of January. Let’s follow up on this multi-month consolidation range as we approach a couple of key data.
First of all the data I am talking about is Thursday’s FOMC meeting minutes, and Friday’s Canadian employment change data. The USD/CAD fell last week after the disappointing US jobs report. However, we can see that price stayed above the range support area around 1.2350-1.24.
The hold above this range support keeps a bullish bias in USD/CAD in the medium-term. But in the short-term, it is simply staying neutral as price rebounds back into the middle of the range. This shows a market squared up ahead of the fundamental risks. Let’s see what happens after Friday. If price closes above 1.26, we are probably going to see bullish pressure next week towards the highs around 1.28. This scenario is likely if the Canadian jobs data underwhelms. A break above 1.28 would open up the 1.30-1.3050 area, highs from 2008-2009.
If Canadian jobs data impresses and USD/CAD is able to close the weak under 1.2350, then we have a major bearish correction signal that should open up the 1.20 handle.
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