While the dollar is being sold today, USD/CAD remains relatively well bid on the day, up by about 0.1%. This morning the Canadian trade balance came in as expected while the US trade deficit shrank to its lowest level in over 3 years, helping keep the pair bid despite dollar selling.
The major CAD risk this week is Friday, however, with Canadian employment figures due to be released during the early North American session. The unemployment rate is expected to remain steady at 7.1% and the Canadian economy is expected to add 6.2k jobs.
USD/CAD is very well supported going into this end of the week event risk and there may be some good buying opportunities ahead of the employment report. The pair is supported by two major ascending trend-lines on the daily chart, the closer of which sits at 1.03. That level is also the key 100 day EMA, providing a nice confluence should we see a sell-off in USD/CAD.
The pair is currently being supported by the 50 day EMA at 1.0340, and a break below this level should lead to a test of the major support at 1.03. A break below 1.03 opens up a test of the final support level: the 200 day EMA and ascending trend-line confluence at 1.0190 or so.
Written by: Liam McMahon, Currency Strategist – GlobalFxClub.com