USD/CAD had another schizophrenic day during the Tuesday session as we have bounced aggressively sense the end of last week. The 1.0250 level is in sight now, and this was our trigger price to go along of this pair. With the headlines out of the Middle East, and of course the worry about global slowdown, this pair is going to be a very difficult one to trade in till we get some type of clarity.
On a clean break in daily close above 1.0250, we are long this pair. Until that happens, we simply cannot buy as we are getting so close to the resistance level. Remember, the Dollar could continue to get a safety bid as people worry about global growth. This of course hurts the demand equation for light sweet crude, and as such should hurt the Canadian dollar over time. The one ace in the hole that the Canadian dollar has is the fact that there are a lot of hot button issues dominating the headlines in the Middle East at the moment, and this could of course push oil prices higher.
Written by FX Empire