- We have seen the US dollar bounce a bit during the trading session here on Thursday as we are getting ready for the non-farm payroll announcement on Friday.
- I suspect that we might be looking at a little bit of short covering here ahead of that major announcement, which does make quite a bit of sense as there is almost certainly going to be volatility just waiting to happen at this juncture.
With this, I think you have to accept the fact that we may be a bit sideways over the next 24 hours until we get that information. But I am watching the 1.40 level with great interest. If we can break above there, then it is very possible that we could see the U.S. dollar truly take off to the upside, perhaps breaking towards the 1.42 level. The 1.3750 level is an area that has been significant support previously. So, breaking down below there then opens up the move down to 1.35.
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Non-Farm Payroll Only, No Canadian Numbers
This is not a Friday where we get both Canadian and American employment figures. So, I’m not expecting a lot of push pull, I think it will come down to what happens in America. If the jobs report is hotter than anticipated, then people will start to look at the Fed and think that perhaps the advanced GDP numbers on Wednesday won't really come into the picture, at least not yet, because if we have full employment in America, that provides a bit of inflation just simply because people will be buying things.
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Furthermore, it's worth noting that oil has gotten absolutely hammered as of late, so that doesn't help the Canadian dollar either. I think we're in a state of flux right now in this USD/CAD pair after the Canadian election and the jobs number coming.
So, I would anticipate a lot of choppy volatility but pay attention to those levels I mentioned.
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