The U.S. dollar has been choppy against the Canadian dollar on Thursday, which makes sense, as both economies are reporting employment figures on Friday. At this point, the market is trying to settle positions ahead of that volatile announcement.
USD/CAD
The U.S. dollar pulled back just a bit during the early part of the trading session on Thursday to test the 200-day EMA. The 200-day EMA is an indicator that a lot of people will be watching, especially as it sits right at the 61.8% Fibonacci retracement level.
It is also an area that had previously been resistance at the top of the double bottom. Now that the market has turned around to show signs of strength later in the day with a hammer, the market is likely to continue to see a lot of volatility and choppiness.
Employment in Canada and the USA
Keep in mind that on Friday we have the employment numbers coming out of the United States and Canada. With this being the case, if the market were to rally from here, the 1.4050 area is right about where the 50-day EMA sits. If we were to turn around and break down below the bottom of the candlestick from the Wednesday session, then it could open up deeper selling.
But really, at this point, it is difficult to get overly involved in this pair due to the employment numbers coming out of both countries. Ultimately, I think we have a situation where we are trying to figure out if we are at the bottom.
Canada is expected to add 14,600 jobs, while the United States is expected to add 65,000 jobs. That being said, it is worth noting that Canada’s latest employment numbers were a huge mess, so we will be particularly interested in what is going on there.
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