The USD/CAD pair tried to rally during the session on Friday, but you can see that the 1.0550 area was far too resistive in order to let the market go higher. That being the case, the market formed a shooting star which of course is a very negative sign. On top of that, there is a massive cluster in this general vicinity from the month of June, and because of that it makes sense that we had a bit of trouble going higher. Alternately, on Friday we close that the 1.05 handle which of course is a round major number, and because of that I feel that this market will run into bit of trouble now.
Nonetheless, is very possible that this pullback should end up being a buying opportunity. After all, the oil markets are running into major resistance just above, and as a result the Canadian dollar may suffer as well. On top of that, the world awaits to see what the Federal Reserve going to do about quantitative easing, and whether or not they are tapering off. That will have a massive effect on the US dollar in general, which of course should transfer to this market.
Dips could be buying opportunities
I still believe the dips could be buying opportunities and I would be all over a supportive candle at the 1.04 handle. After all, that area was significant resistance previously, and we have now broken above it. Nonetheless though, I don't think that this market will find any real traction until we get into the month of September in no exactly what the Federal Reserve going to do. Because of that, I would be more apt to trade this for short-term trader’s perspective and take my profits relatively quick. On the other hand though, if we did get above the 1.06 handle, this pair should go to 1.10 before too awfully long. I am not interested in shorting this pair at the moment, I see far too much noise below that could cause major problems for the sellers over the next couple of weeks.
