By: Colin Jessup
Last week the Greenback had another relatively strong week against its northern cousin, the CAD (aka Loonie). After price broke and held above the strong weekly resistance level of 1.025, it was a good bet we were going to see a re-test of the 1.05 level, and possibly the October high of 1.0656. While last week's weekly candle did indeed break above the 1.05 level, it did not close above this level, possibly indicating some retracement prior to testing the next resistance level. From a Daily or lower time frame perspective, we should see support at around 1.035 and 1.029 with resistance at 1.05 and 1.065. If the US economy continues to make small gains we could see the value of the Loonie deteriorate further and possibly retest the 1.085 level from May 2010. My outlook on this pair is cautiously Bullish, as we may be setting up for a double top on the daily chart. That said, in order to extend the Greenback's gains longer term, we will need to break above 1.0656 to confirm the Bullish trend.
Happy Trading!
