USD/CAD Forecast July 6, 2012, Technical Analysis

The USD/CAD pair fell during most of the session on Thursday, but turned around to form a hammer just above the 1.01 level. This is probably due to the fact that the nonfarm payroll number comes out later today; and this pair tends to be very sensitive to that economic announcement.

The latest action in this pair certainly is bearish, and with oil markets nervous over Iranian threats, there’s a good chance that the Canadian dollar will gain overtime as it is a petrocurrency. However, this hammer shouldn’t be ignored and as such we think that a bounce could possibly be coming. On the other hand, a break below the bottom of the hammer is a very bearish signal it would have a selling and aiming for the parity level. As for the upside, we think eventually this pair does rise over time, but buying at this low level would be very tricky if not impossible.


Written by FX Empire