By: Colin Jessup
The Greenback is extending its gains against its northern cousin, the Loonie. A few hours before the open of the London session we see that price on the USD/CAD has broken through resistance at 1.0487/1.0500 and looks strong. However, I anticipate something of a pull-back before we head for the next key zone of 1.0650. I would expect that if we fall below 1.0480 we may see price fall back to 1.0440 or lower, before continuing upwards again.
Looking at the Stochastic on a daily time frame we are above the 80 level and starting to see a cross. This is usually an indication that price is indeed heading for a fall, but the MACD and moving averages are all still pointing up. This could be an indication of higher prices to come for the Greenback. Lower oil prices are contributing to the weakening Canadian economy, but we may see some support for the loonie on Thursday & Friday with economic data coming from Canadian Building Permits, Ivey PMI, & Employment Data numbers all forthcoming.
Happy Trading!
