The USD/CAD pair had an interesting session as it continues to show signs of support at the 0.9850 level on Wednesday. The hammer that was formed on Tuesday matches a hammer that was formed the previous week, and as such it does look like we are starting to find serious support. It should also be noted that the area is the bottom of a larger consolidated area that extends from 0.98 to the 1.04 handle. Because of this, we think this market is trying to go higher at this point. We would wait until a clearing of 0.99 solidly on the daily close in order to go long, and would also be willing to short on a break below the 0.98 handle as it would show a continuation of the downside momentum. It should be noted, that the move higher would more than likely be a grind, and there could be a lot of volatility on the way up.
Written by FX Empire