The USD/CAD pair fell again on Friday as the Dollar negative sentiment continues. The reaction is to words by Federal Reserve Chairman Ben Bernanke, in which he expressed the Federal Reserve’s willingness to prop the economy up if things fail again. This shouldn’t have been a surprise, but it appears the market takes this as a sign that quantitative easing is coming. Unfortunately, there will probably have to be a poor spell in order for this to happen, and if it doesn’t – we expect the Dollar to snap back in a big way.
The pair has recently been in consolidation, and the recent move did break below it. However, the 0.98 handle hasn’t been overcome, and the round number is almost always going to be where the real support or resistance is in a pair. Until that level gets broken below and we close on a daily candle below it – we are waiting to sell.
Written by FX Empire