The USD/CAD pair fell hard during the session on Friday, breaking below the 1.08 level. This was an area that I thought was going to hold as support, and since we are broken down below it, I believe that this is a fairly significant signal at this point. However, I should point out that there is an uptrend line below, somewhere near the 1.06 handle. It is because of this, I think that the significant break down is probably more of the short-term variety, and it’s not until we break down below the 1.06 level on a daily candle that I feel that the trend has reversed to the downside yet again.

Ultimately, I think that if you are quick enough, you can short this market now, but turned back around and start buying somewhere closer to that massive support if we get the right candle. It’s hard to tell what will happen obviously, but I do recognize that there is a significant amount of support in that general vicinity, thereby making any selling opportunities now ones that you need to take quickly and get out of.

Watch the oil markets, they could lead to a higher Canadian dollar after all.

Once the oil markets, because they do look rather healthy right now. Generally, this means that the Canadian dollar should continue higher, as the Canadians export so much crude oil. A lot of Forex traders will use the Canadian dollar as a proxy for oil markets, and that is the one thing that really could break this market down below the 1.06 handle. However, there has been a bit of disparity in the normal correlation between the 2 markets. With that being the case, you have to keep an open mind but be aware the fact that the old correlation could come back in full force.

Ultimately though, this is a market that tends to chop around sideways for long periods of time, and then suddenly move in one direction or the other for massive gains or losses. That’s probably what we’re going to see again, but in the meantime I think that the next 150 pips or so is to the downside.

USDCAD 62314

Related Articles
  1. Economics

    Is a Recession Coming?

    In the space of a week, the VIX Index, a measure of market volatility, spiked from 13, suggesting extreme complacency, to over 50, evidencing total panic.
  2. Technical Indicators

    Use Market Volume Data to Determine a Bottom

    Market bottoms often carve out classic volume patterns that let observant traders make fast and accurate calls.
  3. Forex Strategies

    These Are The Best Hours To Trade the Euro

    Six popular currency pairs and numerous secondary crosses offer euro traders a wide variety of short- and long-term opportunities.
  4. Professionals

    Tips on Building a Resume for a Private Equity Job

    Trying to land a job in the coveted private equity sector? Ensure your resume meets the stringent PE job requirements with these important tips.
  5. Savings

    Best Places to Exchange Currency in Chicago

    Whether you're leaving the Windy City or arriving with a stack of foreign cash, these are your best bets for currency exchange.
  6. Mutual Funds & ETFs

    ETF Analysis: United States Brent Oil Fund

    Learn more about the United States Brent Oil exchange-traded fund, the characteristics of the fund and the suitability and recommendations of it.
  7. Mutual Funds & ETFs

    ETF Analysis: ProShares Ultra Bloomberg Crude Oil

    Find out more about the ProShares Ultra Bloomberg Crude Oil ETF, the characteristics of UCO and the suitability and recommendations of UCO for investors.
  8. Credit & Loans

    5 Signs a Reverse Mortgage Is a Bad Idea

    Here are the key situations when you should probably pass on this type of home loan.
  9. Stock Analysis

    Fortinet: A Great Play on Cybersecurity

    Discover how a healthy product mix, large-business deal growth and the boom of the cybersecurity industry are all driving Fortinet profits.
  10. Stock Analysis

    2 Catalysts Driving Intrexon to All-Time Highs

    Examine some of the main reasons for Intrexon stock tripling in price between 2014 and 2015, and consider the company's future prospects.
  1. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s ...
  2. Theta

    A measure of the rate of decline in the value of an option due ...
  3. Record Date

    The cut-off date established by a company in order to determine ...
  4. Supply

    A fundamental economic concept that describes the total amount ...
  5. Purchasing Power

    The value of a currency expressed in terms of the amount of goods ...
  6. Investment Banker

    Someone working at an institution raising capital for companies, ...
  1. Can my IRA be garnished for child support?

    Though some states protect IRA savings from garnishment of any kind, most states lift this exemption in cases where the account ... Read Full Answer >>
  2. Why is my 401(k) not FDIC-Insured?

    401(k) plans are not FDIC-insured because they are typically composed of investments rather than deposits. The Federal Deposit ... Read Full Answer >>
  3. Can I use my IRA savings to start my own savings?

    While there is no legal reason why you cannot withdraw funds from your IRA to start a traditional savings account, it is ... Read Full Answer >>
  4. Can creditors garnish my IRA?

    Depending on the state where you live, your IRA may be garnished by a number of creditors. Unlike 401(k) plans or other qualified ... Read Full Answer >>
  5. Is Japan an emerging market economy?

    Japan is not an emerging market economy. Emerging market economies are characterized by low per capita incomes, poor infrastructure ... Read Full Answer >>
  6. How does an IRA grow over time?

    Individual retirement account, or IRA, growth depends on many factors, including what types of investments are included in ... Read Full Answer >>

You May Also Like

Trading Center

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!