Greenback gears up ahead of payrolls

The drop in oil prices has put the CAD on high alert, with the currency underperforming the FX space.

Source: Bloomberg

Earlier in the week I suggested there could be buying opportunities in USD/CAD, particularly heading into US non-farm payrolls. US data through the week has been fairly positive as the ADP non-farm payrolls came in ahead of estimates. This has given the US dollar a tailwind while the CAD is experiencing a headwind from the weaker oil price.

The $1.2400 barrier acted as resistance and was the key trigger for a momentum play. This level has now been broken and the pair managed to run to a high of $1.2600. USD/CAD remains within striking distance of $1.2600 and the price action looks quite bullish.

April highs around $1.2670 will be the next key level to look out for, particularly given the pair is likely to be in overbought territory by that stage. Any dips back into $1.2400 would be a good buying opportunity for traders.

Click to enlarge

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.