Thursday looks to be the first positive session for the Canadian dollar in 10 trading sessions.
The Line In The Sand
Futures traded to their lowest levels since May of 2010 on Wednesday but for now, it appears .9350 will be the line in the sand for December futures. One cannot look at the Canadian dollar without looking at the action in metals and energies, which is why I have included charts on gold and Crude oil...as seen below.
I'm operating under the influence that Crude oil may have found a meaningful bottom last week and has rallied nearly $6 a barrel since then. In fact, as seen, we are challenging the 50-day MA as of this post -- the green line. January futures are also above the down-sloping trend line that has capped upside since labor day.
Close To Inflection
This week gold traded within $10 of the $1200 level and the same level that held as support in late June may again serve as the line in the sand. If Wednesday's action does not prove to be a key reversal, I believe we are very close to an inflection point.
I am hard pressed to believe that IF, in fact, energies and metals track higher, the Loonie will not follow. It's based on that logic that I think scaling into bullish trade makes sense.
And don't forget that we get job/unemployment #s domestically and from our neighbors to the north, so expect job creation -- or lack thereof -- to be the catalyst to get the Loonie moving higher.
Expectations Follow
- CAD unemployment 6.9%
- USD anticipated drop in unemployment rate from 7.3% to 7.2%
- USD expected 180,000 jobs added
