The USD/CAD pair rose for much of the session on Tuesday, but fell again once the Federal Reserve released its minutes from the last meeting. The release didn’t give any signs of further quantitative easing, and the markets bought the Dollar as a result. In this pair though, the dynamics were reversed, as the lack of further QE suggests that the US economy will continue to strengthen. As Canada sends over 80% of its exports to America, which means that the US will buy a lot of Canadian exports going forward. Because of this, the pair looks tilted to the downside now. However, we need to see a break below the 0.9850 level gives way on the daily close. We will sell any bounce towards the parity level, or the above mentioned breakdown.
Written by FX Empire