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The USD/CAD pair had a relatively strong day during the Friday session as the markets were rocked by another poor employment number out of the United States. The pair gave back some of its gains towards the end of the session, but did finish the week with a hammer. This hammer is placed at a perfect spot, so we are simply looking for a break of the Friday highs in order to go along. If we get this signal, we suspect that the 1.035 level will be targeted first. As for anything above that, it will require significant momentum, but we certainly think the risk is to the upside in this pair as bad news seems to be right around the corner at any given minute.
If we see a break of the bottom of Thursday's hammer, we would consider going short for a short-term trade down to the parity level. Otherwise, we simply will wait for our buying opportunity as we do prefer alongside at this point.