The USD/CAD pair fell during the Tuesday session as the oil markets broke above the $85 barrier. This does suggest this pair is going to continue much lower, perhaps to the parity level before hitting any significant support. With this in mind, we are willing to sell this pair at this spot. We don’t know about the longer-term trend, as we still think there’s potential for this pair to rise over time but it is obvious to us now that this pair is going to be following in the short term.
Parity makes a nice “even” whole number for the market to base itself off of. With this in mind, we are willing to hang onto the trade for too long, as the oil markets will certainly be had by the demand equation yet again.
Written by FX Empire