Today’s non-farm payrolls report was finally a reason to buy USD/CAD … and it lasted all of 2 hours.
Like cable, when a market can’t hold gains on good news you have to be very skeptical that it can rebound. News is the ultimate barometer of markets because it gives you a sense of the underlying feeling.
On Tuesday, I wrote that the squeeze lower in USD/CAD was probably overdone in the short-term and that proved to be true. I would have expected a bounce to 1.0700 but right now the appetite to sell USD/CAD is relentless and I’m not sure it’s going to come.
That leaves the pair in a tough spot for traders. It’s painful to sell it here especially with the holiday volatility likely to set in later today and tomorrow but it’s difficult to stay on the sidelines with no headlines on the calendar to derail the CAD train. Ultimately, patience always wins out so it’s better to wait for the right opportunity.
Look how aggressively the bounces are sold in USD/CAD
