The USD/CAD pair rose sharply during the Monday session as the global risk appetite waned. However, by the end of the day the pair had pullback on much of its gains, and had formed something along the lines of a shooting star. While the candle isn’t necessarily a perfect shooting star, it does suggest that the bullish traders going to have a hard way to go at this point in time. We still think that this market is far too tight in general based upon various support and resistance zones to be bothered with. Oil markets of course will have a major influence on it, and as such we really aren’t that interested as the oil markets are being slammed around by various headlines at the moment.
On a break above the 1.0250 level, we would be buying this pair as that would show a significant breakdown in the resistance. However, on the downside we see a move down to parity being very likely. It is below parity that we become concerned about massive support again. If we can manage to break down below lower than that, we will see support at the 0.97 area.
Written by FX Empire