USDCAD: The pair is on the verge of reversing its two-day corrective weakness as a rally is now seen with the risk of even pushing towards its Oct 18’2011 high at 1.0262. It is now testing its minor resistance located at the 1.0222 level, its 02’2011 high with a convincing violation of there turning focus towards the 1.0262 level and then the 1.0386 level, its Oct 10’2011 high. Further out, resistance resides at the 1.0523 level, its weekly 200 ema. Its daily RSI is bullish and pointing higher suggesting further strength. On the downside, the risk to this analysis is for the pair to return below the 1.0053 level, its Nov 03’2011 low and ultimately the 0.9890 level, its Oct 27’2011 high. This will resume its short term downtrend towards the 0.9779 level, its Sept 16’2011 low. A firm penetration of here will set the stage for further declines towards the 0.9724 level. All in all, the pair remains biased to the upside as it looks to resume its recovery initiated from the 0.9890 level.
