USD/CAD Technical Analysis October 6, 2011

USD/CAD broke below the shooting star that we discussed yesterday on Wednesday. As a result, a “perfect” sell signal was triggered. We understand that the 1.0650 area is a massive monthly resistance area, so shorting from here would normally be a good idea. However, we also see the 1.03 area as a potential reentry from the long side as well. The fundamentals for the global economy simply aren’t strong, and as a result – oil should continue to struggle over the longer-term. The pair should be thought of as a “buy on the dips” pair at this point, and we would be willing to buy at the 1.03 level with supportive candles.

Written by FX Empire