The USD/CAD pair rose during the session on Thursday, to test the top of the shooting star that was printed on Wednesday. The “risk off” trade seems to be back into play now, and the commodity currencies all got whacked during the session. However, we did not break the top of that shooting star, so there really wasn’t a signal at that moment in time. This would be a countertrend trade, so we will have to be very picky when it comes to buying this pair.
It looks to us that the parity level above will be very resistive anyway, so more than likely it’s going to be prudent to ignore any buy signals. Looking forward, we think that rallies are set up to be faded, and that may be what’s about to happen. We are currently flat of this market, and don’t necessarily feel the need to change that status right now.
Written by FX Empire