More downward pressure ahead
The US dollar has initially tried to rally during the day on Thursday against the Canadian dollar but found the 1.26 level as a bit too much to overcome. Furthermore, the 50 day EMA above is starting to slope lower, so it is possible that we could see a bit of resistance there as well. What is particularly telling is that the candlestick for the session is a shooting star, and that suggests that we probably have more downward pressure ahead.
This will be an interesting session on Friday, because it is Good Friday, and a lot of Wall Street will not be working. However, we also have the jobs number coming out of the United States and almost certainly will have some type of an announcement from OPEC as they continue to meet to decide whether or not to extend the production cuts. Some members are talking about production cuts, some members believe that they should extend production, so at this point in time the Canadian dollar is probably going to be moving on a lot of rumors.
The US dollar has been in a downtrend for some time, so one would think that it is probably easier for this market to break down, reaching down towards the 1.25 in the short term. If we break down below there, then the 1.24 level probably gets targeted. That being said, I think it will probably be a very noisy session but if we were to break above the 50 day EMA, it is likely that the market then goes looking towards the 1.27 level, followed by the 1.28 handle.
I do believe that there is the possibility that we have enough clarity after the Friday session that we can perhaps put a little bit more analysis into this pair and take advantage of whatever move comes. I think at this point, it is also worth noting that we are at the major support level on the monthly chart, so I think we will continue to see a lot of noise due to the fact that a lot of technical traders will be paying close attention to what should be a major area of importance. That being said, we probably have a lot of short-term trading ahead of us with more of a downward attitude.