By Will Peters

The Canadian Dollar exchange rate complex retains its new-found strength in the Friday morning session in London, but the risks of a fresh lurch lower remain a distinct possibility.

Friday is seeing the Canadian dollar (CAD) retain its recent strength. We expect markets to remain consolidative ahead of today's US Non-Farm Payroll report.

On Thursday, CAD picked up fresh bids in sympathy with a rampant Australian dollar; the commodity currency complex is having a good day and while CAD may not be steaming ahead it is benefiting nevertheless.

Gains against the pound sterling are being witnessed as a longer-term trend higher in GBP-CAD wanes.

Of course there is also yesterday's BoC event to thank. Either way, the CAD looks as follows:

Analyst Jonathan Terela at Western Union warns that the strong move higher could yet fade: "Expect this power move to retrace a bit through the day and settle down as traders are hesitant to take large positions prior to important economic releases. Look for 1.0960 to be a key level of support, followed by 1.0910 level, which was the February low for the USD/CAD currency pair."

Beware: The selling may not be over yet

Despite recent gains in the rate we must stay mindful to longer-term forecasts that suggest further losses in CAD can be expected into mid-year. Against the pound sterling the CAD may reach