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Forex pairs in this Article » USD/CAD

The USD/CAD pair fell during the session on Tuesday, breaking well below the 1.03 handle. This was an area that I had suspected would be supportive, and needed to be overcome in order for the sellers to take control. Now that they've done this, I feel that this market is probably going to head down towards the 1.01 handle, and then possibly parity.

The oil markets look like they're ready to continue their bullish run, and in general that should help the Canadian dollar. Because of this, I am not surprised at all in this move, and frankly wonder why it took so long. Nonetheless, I think that a breakdown to parity is very possible, but will more than likely be met with a lot of choppiness on the way down.

On the other hand, we could see a bit of a breakout to the upside, but I would need to see a close above the 1.0450 level in order to start buying. If we managed to break above that level that would be a very bullish sign, and at that point in time I think we would be ready to breakout to the upside on a fairly significant move. That would especially be true if the Canadian numbers continue to be relatively weak, which of course should not be helping the Loonie at all.

USD/CAD Daily Outlook - July 24

Choppiness ahead, you have to be patient

In order to trade this market, you need to be very patient. It's almost always choppy to begin with, and then will have a sudden move in one direction or the other. We are probably about due for one of those moves, but you need to be patient and wait for it to set up. Going forward, I think that the move is probably down from here, as we have definitely lost a little bit of the momentum to the upside over the last several sessions. The real question is whether or not you will be able to hang onto all of the volatility down to the parity handle.

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