The USD/CAD pair tried to rally during the session on Monday, only to turn around and form a shooting star at the all-important 1.0150 level. The currency pair and the oil markets are both in harmony as the light sweet crude market is pressing up against serious resistance. As they are negatively correlated, it makes sense that this pair is sitting on top of support.
The market looks weak in general, but there has to be a lot of support below this area we think. Is because of this, that we see the parity level as the true key to breaking down this pair. It really isn’t in till we get below that but we feel comfortable shorting even though we see the ultra short term opportunity present itself now. With this being said, we are presently flat of this market and would have to see oil breakout in order to continue shorting. As for buying, it is very difficult to do at this point and we would have to see a break above the top of the Monday shooting star to even consider it – and even then we would still have to seriously think about it.
Written by FX Empire