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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.