By: Colin Jessup
With the Greek debt crisis set to take over the Forex news headlines this week, I thought I would focus on the advances of the Loonie against the Greenback... after disappointing employment numbers from Canada on Friday the Loonie lost some ground against the Greenback, only to gain it back and then some once the positive Non Farm Payroll report was released in the USA. Since Canada's largest buyer of products from Canada is the USA, the good news from the NFP gave the Canadian Dollar (Loonie) strength on stronger export potential. We will most likely see prices retest the October 2011 low at 0.9891 which is also acting as strong support. We may see this level touched before a pull-back to parity and then another bearish advance, but if price breaks below 0.9890 with strength 0.9725 is not out of the question. Prices could turn Bullish however as investors return the the Greenback as a safe haven from the falling EURO if Greece doesn't strike a new deal soon. If Bullish action returns, look for resistance at Par (1.00) and again at 1.0075. The key level for the Bulls will be Parity and any failure to break above could result in further gains from the Loonie, with the pairs targeting the previously mentioned 0.9890. This pair is clearly bearish after breaking a pennant formation on the weekly chart, bullish volumes dropping and the RSI turning strongly downwards as well.
Happy Trading!
