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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.

All trading involves risk. Losses can exceed deposits.
Greenback
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.

USD/CAD
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