The USD/CAD pair tried to rally during the session on Monday, but as you can see pullback in order to form a shooting star. That being the case, it appears the market is probably going to retrace some of the gains that we had made on Friday, after the horrible Canadian jobs number. Ultimately, there is an uptrend line just below, and the 1.06 level as well that should continue to push this market higher.
I have no interest in shorting this market after the shooting star though, as I believe that there is so much support below. On top of that, I believe that ultimately the move higher has been strong enough from the bottom that this trend line should hold. In fact, it is not until we close below the 1.06 handle that I have any interest in shorting as I believe that the longer-term trend line has been so impressive.
Ultimately, I believe that looking for buying opportunities is what I must do.
Looking at this market, I think that the next move will probably be to the 1.08 handle, but I don’t know whether or not it is going to do it right away, or if we need to grind our way higher. Nonetheless, I will simply let the markets telling what they want to do, and ultimately I believe that the pair will break north of the 1.08 handle and head into the consolidation area just above there.
Once we enter that previous consolidation area, I believe that the market will then try to head to the 1.10 handle, which is of course is a large, round, psychologically significant barrier that will have to be dealt with. Above there, I believe that the market goes to the 1.12 level, for the same exact reasons. However, we are heading into the summertime, and I can often slow the Forex pairs down as there’s really no real catalyst in one direction or the other. I think we will gradually grind our way higher, and therefore you must be patient if you’re going to go long on a buying signal.
