Unemployment claims dropped to a 15-year low and this really encouraged USD bulls heading into next week’s non-farm payrolls reading. Apart from the euro and swiss franc, the greenback gained ground against the g-10.
A firmer oil price wasn’t even enough to see the CAD extend its gains against the greenback. USD/CAD had traded below $1.2000 this week for the first time since January but has since found some support and is experiencing a rebound.
There is an uptrend support line that’s been in place since September last year that seems to have kicked in now and is supporting price action. This has seen USD/CAD trade back above $1.2000 and could trigger a near term squeeze higher here. I feel the current momentum could take the pair into the $1.2200 region but should oil prices continue to rise then there is a risk that sellers will come back into the market.