The USD/CAD has been marching south for the last 4 weeks for the most part. The strength is attributed to both a strong Canadian economy and a weakening US Dollar. After yesterday's FOMC statement the pair dropped 28 pips and kissed the Weekly S2 in the process before retreating to close the day at 0.9843. Most of the action during the Asian market hours has been bearish, and the pair looks ripe to continue heading lower. Looking at this pair from a weekly standpoint we see that there is an ascending trend-line anchoring at the July 2011 low of 0.9405, with a mid point at the 2012 low set in September of 0.9632, and intersecting with the Monthly S3 at 0.9675. If the pair makes a higher low again, there is a good chance this is where it will turn at. However, there is a strong support level in between at 0.9775 where both the Monthly S2 and Weekly S3 combine. If the pair fails to break the immediate support at 0.9826, look for resistance at 0.9854 where both the Monthly S1 and Weekly S2 intersect. Beyond that, should the US Dollar push back look for further resistance at 0.9900 and 0.9956. I expect this pair to remain bearish overall, unless we see a major drop in oil prices, or the Yanks come up with something tho strengthen their flailing currency.
Happy Trading!