The USD/CAD pair fell during the session on Tuesday as the US dollar looks set to be debased again by the Federal Reserve. With further quantitative easing seemingly coming on Thursday, this should increase the demand for commodities in general as the Dollar loses value. With this in mind, despair should continue much lower as the 0.98 handle is a distant memory.
We see the 0.95 level is a natural target to begin with, and eventually much lower prices as well. We could even see a move down to the 0.90 level if enough quantitative easing takes place. Ultimately, the jobs report can have a massive effect on the spare as well, so we would expect fairly erratic movement in this currency pair going forward, as the two economies are so intertwined. Nonetheless, this looks like a sell at this point in time.
Written by FX Empire