The USD/CAD pair fell during the course of the day on Tuesday, breaking the back of a hammer from Monday. That essentially makes the hammer from Monday a “handyman”, which of course is a very bearish sign. However, we believe that any fall from here will be bought given enough time, and therefore we are looking for supportive candles below in order to continue buying the US dollar. The oil markets certainly are not helping the Canadian dollar, so therefore we feel that this is simply the market backing up in order to build enough momentum to break above the 1.25 handle.
