By: Mike Kulej
The Canadian Dollar picked up momentum recently, by some accounts, in response to the rising crude oil prices. Whatever the case is, the CAD has appreciated during the last few weeks, especially in relation to the US Dollar.
After spending weeks near the parity level, the USD-CAD finally broke through that support couple of months ago. However, the pace of the sell off was very slow and accelerated only during the last few trading sessions, pushing the price on Monday to 0.9710.
What it All Means
This is significant, because the 0.9700 level is the last important support on the way to the all time low for the USD-CAD. Looking at the weekly chart, we can see that if this level is broken, there is no other technical obstacle for this pair to test the low of 0.9055 established in 2007.
If the USD-CAD moves through the current support with a relative ease, we can expect the downtrend to continue, perhaps at even faster pace. The ADX, a trend strength indicator, is on the rise, suggesting that the trend is gaining momentum. The weekly MACD shows a negative reading, also pointing lower still. Chances are that the USD-CAD will test the all time low in the near future.