The USD/CAD pair broke down during the session on Tuesday in order to finally get below the parity level. We are starting a get into the “meat” of the support below parity, but we think that this move is going to be significant overall. We are not willing to sell at this level but think that any rally should be faded at this point in time.
We are still in a down trending channel, and are writing on the supportive line at this point in time. We think that a bounce could be coming, but the trend is obviously down. We had originally anticipated going long on a bounce from here, but this has been abandoned as we just have seen no strength, nor did we get that buying signal that we were looking for. Looking forward, the oil markets will naturally be a major catalyst for this pair, and they do look ready to move higher which generally move this pair lower.
Written by FX Empire