The USD/CAD pair rose for much of the week, but pulled back in the end to form a shooting star. This pair is almost always influenced by the oil markets, and as a result it is a must to follow both the Light Sweet Crude market as well when trading the Loonie. The oil markets got a bit of a bounce over the last couple of session during the week, and as a result the CAD gained against the USD as well during the last couple of sessions.
The shooting star on the weekly chart is sitting right on top of the 1.02 level, an area that has been big support before. The level should provide a lift to the markets, assuming that the Greek elections don’t produce some kind of gap on Monday morning – something that is very likely. Because of this, we could easily see the Monday open gap below the 1.02 level, and push prices lower. At this point, the parity level would be targeted by the sellers.
The upside in this pair is being pressed upon by the 1.04 level, and it must be said that since last summer we have been in a range between the 1.04 and 0.99 levels – something that looks to be intact. Perhaps this attempt to go lower is simply a continuation of that theme. Because of this, we are becoming more and more comfortable with the idea of shorting this pair.
The 1.02 level will be crucial for the sellers to get below, and if we are under that mark for a few hours after the Monday open, we are ready to sell as well, and aiming for the parity level. The parity level starts a significant amount of support all the way down to the 0.99 level for us, and as a result we aren’t willing to be short below it. In the meantime, it comes down to voting in Greece more than anything else – and the gap that we see is going to lead the way for us.
Click here a current USD/CAD Chart.
Originally posted here