The USD/CAD pair rose during the session on Monday as the market took a bit of a breather. We have recently broken down below the 0.98 handle, and as such that area should be resistance now. After all, it was the bottom of a massive consolidation zone going all the way up to 1.04 that had contained this market for the previous year.
Because of the recent action in this currency pair, we are hoping to see some type of bearish candle at the 0.98 handle in order to sell this market. We think that one of the biggest reasons for the pullback in the Canadian dollar over the last couple of sessions is a concern of a potential SPR release. If this release drives down the price of oil, this market will rise. However, we think it will be a temporary blip on the way down to the 0.95 handle.
Written by FX Empire