After surging higher against every major counterpart on Thursday and taking out key support/resistance in the process, the question now is whether the US dollar’s unexpected rally will roll on.

The US dollar (USD) continued to rally throughout Asian and early-European trade today, with the greenback strong across the board: EURUSD fell through the 1.3000 barrier, GBPUSD broke 1.5400, and USDJPY maintained its vertical ascent, reaching 101.44 before pausing.

There was very little news on the economic calendar in Europe today, with only the UK trade data coming in a bit weaker than expected. The UK trade deficit widened to -9.1 billion versus -9.0 billion forecast, and a bit better than the -9.4 billion reported the month prior. The data had little impact on GBPUSD, but the currency weakened in the overall dollar rally, tumbling through the 1.5400 figure in morning London dealing.

One side effect of the great leap forward in the USDJPY has been the unwinding of the safe-harbor trades. USDCHF has managed to soar as well, while taking EURCHF all the way to 1.2460 before settling down.

The majors now stand at key support levels against the greenback, with EURUSD pressing near the long-term range bottom of 1.2950, GBPUSD nearing 1.5300, and AUDUSD zeroing in on the seminal parity mark.

Yesterday's move was not only a surge in USDJPY, but a massive rally in the dollar versus the G10 in general, and it will be interesting to see if the markets will try to press the move further in today's North American session or stage a rebound in high-beta currencies now trading near key support levels.

The Only Non-Casualty of the Dollar Rally

The one unit that has survived the surge in the greenback relatively unscathed is the Canadian dollar (CAD), which has shown relative strength yesterday and today. USDCAD remains well below the 1.0100 level, and the loonie is enjoying the "North America bid" as investors reposition towards the region that appears to be economically stronger than the rest of the world.

Today's Canadian employment data, which is the only major release on the North American docket, could go a long way towards supporting that thesis. The market anticipates a rise of 14.8K versus a horrid print of -54.K last month.

Canadian labor data has a history of mean reversion after massive prints in either direction, so the chances for a rebound are strong. If the number prints at 20K or better, that could fuel a further rally in the loonie and push USDCAD to test parity as the day progresses.

By Boris Schlossberg of BK Asset Management