The USD/CAD pair initially tried to rally during the course of the day on Tuesday, but as you can see it continues to struggle near the 1.31 handle. Because of this, we ended up forming a shooting star for the day. With that, I believe that the market should try to reach down to the 1.30 level, which of course is very major, and has been a massive resistance barrier previously. After all, it’s where we stopped after the financial crisis, and as a result it should continue to be massively important in this market. In fact, I believe that the support should run from the 1.30 level all the way down to the 1.28 handle. There is a significant amount of support in this zone, so a supportive candle in that area is reason enough to start going long.
Looking at this pair, buying is the only thing you can do
Looking at this chart, this is a market that looks it’s ready to continue going much higher, and therefore I feel it’s only a matter of time before buyers get involved. I think that this pullback is very healthy in what is otherwise a very strong uptrend, but keep in mind that this pair tends to grind sideways for long periods of time as the 2 economies are so heavily intertwined. Crude oil markets also are highly influential when it comes to the Canadian dollar, so having said that it makes a lot of sense that you have to pay attention to the WTI Crude Oil market at the same time. That particular crude oil market looks as if it is ready to bounce a bit, so this market is probably going to pull back in sympathy. However, looking the longer-term charts I feel that it’s only a matter time before the buyers get involved. I am not selling this pair, I am waiting for supportive candle below, or a move above the 1.32 handle.
