The USD/CAD pair had a fairly quiet session on Monday as the oil markets pulled back ever so slightly. It should be said that the oil markets formed a hammer, and this suggests that perhaps oil still has a bit of underlying strength in it. The $85 level in the light sweet crude market will be crucial as if it gives way the Dollar should fall against the Canadian dollar in general.
The 1.0150 level in this currency pair seems to be supportive, and it hasn’t been broken convincingly at this point in time. It is that level that we are watching in order to start selling again. On a daily close below that mark, we are more than willing to sell to the parity level. As for buying, it would be very difficult unless of course some type of situation were to suddenly break down the oil markets. We do think ultimately this pair rises based upon lack of industrial demand, but we do not have the technical setup at this point in time to think about going long.
Written by FX Empire