The USD/CAD pair shot straight through the parity level for most of the session on Wednesday as the fear trade came back into play. The level has held in a sense though, as the daily candle produced a shooting star. On a break lower, this pair should continue to test the lower end of the trading range near 0.98 or so. The 1.01 level needs to be broken in order for us to go long in general, and the failure during the Wednesday session only puts a highlight on this point.
The Light Sweet Crude markets have seen three hammers in a row at the $95 area, and this was the level that we suggested was massive support for the commodity. If the oil markets do bounce from here, there is a very good chance that this pair will fall. Also, it would simply be a return to consolidation. We are selling a break of the bottom of the daily session on Wednesday, and not buying until we see a daily close above the 1.01 handle.
Written by FX Empire