By: Mike Kulej
The USD-CAD currency pair has been in a prolonged down trend. Since late last year, the price the price has been under the parity, an important psychological level, without much of a correction. After reaching 0.9444 earlier this week, it appeared to be well on its way to test the all time low of 0.9057 from 2007.
Not it seems that there is a small detour. While USD-CAD behavior has been very one sided; only down, it lacked the velocity of other currency pairs moving in the same direction, like the USD-CHF or the USD-JPY. That makes a little weaker and possibly more susceptible to corrections.
Over the past two days, the price started change direction, with a relatively large jump (relative to preceding action) on Wednesday. The USD-CAD climbed to 0.9603, testing the intermediate term trendline. For now, that resistance held, but it could be retested soon, making the correction official.
For that, the USD-CAD will have move above the minor high of 0.9603. Should that happen, the price could proceed to 0.9720, the next resistance. However, the major down trend is not likely to be effected. Until we see signs of reversal on the daily chart, the USD-CAD remains bearish long term.