USD/CAD pair bounced hard off of a trend line during the week, especially perpetuated by the move on Friday. The Friday move of course was brought on by an extremely horrible Canadian employment announcement. Because of this, it appears of the Canadian dollar will continue to get beat up, and the fact that we have found support at the uptrend line certainly is no coincidence in our opinion, and its reason enough to start buying. The 1.06 level below is massively supportive as well, so we had at least two good reasons the think about going higher.
The 1.08 level above will be resistance, as we should continue to try and press against the selling pressure. A move above the 1.08 level should in fact continue the bullish momentum that we would have in the market, and should send this market looking for the 1.10 level, the next natural resistance barrier based upon the fact that it is a large, round, psychologically significant number.
We think that the market is still intact overall, and that the bullish momentum should continue but recognize that this market is one that has been very choppy from time to time, followed by impulsive moves. We believe that buying a break of the top of the range is the way to go going forward, or looking at the short-term charts for supportive candles below in order to continue to go long.
On the other hand though, if we do manage break down below the 1.06 handle, this market will more than likely fall to the 1.03 level first, and then all the way down to the parity level, and Heather area that was extraordinarily magnetic on a longer-term chart. However, the selling of this market seems to be the least likely thing to happen and as a result the market is essentially a “buy only” market at the moment, and as a result we are looking for the aforementioned buying opportunities.
