Potential signal:
- I am buying here.
- I have a stop loss at 1.3925 level, and if the market rallies after the Canadian Employment numbers on Friday – I am buying more.
- Target is 1.42 at the moment, but likely to be brough higher.
The US dollar has shown itself to be rather strong during the trading session here on Thursday as we continue to see the US dollar rally against most things. Now that we are above the 1.40 level, that's a victory for the US dollar against the looting. And I think it opens up a move to much higher levels.
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Short term pull banks are most certainly possible, but really at this point in time, why would you buy the Canadian dollar, they lost jobs in August, and the September number comes out for employment in Canada on Friday. And it's possible that might be rather disappointing as well. With that being the case, the Canadian Central Bank finds itself in a situation where they may have to do something to prop the economy up and that will mean lower rates or quantitative easing. It's the only thing central bankers know how to do.
On Pullbacks…
Short-term pullbacks, I think have plenty of support all the way down to at least the 1.39 level, and therefore I remain bullish. In fact, it wouldn't surprise me at all to see this market go well beyond the 1.42 level, but right now that's my short-term target. I've got no interest whatsoever in trying to fight the momentum that we see, and therefore I will look at each short-term pullback and bounce as an opportunity, and we'll add accordingly.
The Canadian dollar is one of my least favorite currencies right now. And I do plan on taking advantage of the U.S. dollar strength against it. As we continue to see this market, I think eventually try to get back to the 1.45 level. Although this tends to be a bit of a slow moving pair most of the time. So, keep that in mind that you have to be very patient, but you also get paid at the end of every day to stay on the long side of this trade.
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