The USD/CAD pair originally fell during the session on Friday, but did bounce in order to form a hammer. This directly competes with the shooting star from the day before, but we also see the 0.98 handle above is massive resistance. Because of this, we are not going to take this candle as a buy signal, rather as an anomaly in an otherwise down trending market.
With this being said, the oil markets have found a bit of support, and this of course will help the Canadian dollar going forward. We still maintain that the break of the 0.98 handle was a significant move based upon longer-term charts, and the breaking of that consolidation area does suggest that we are going to eventually see 0.92 before this move is all said and done.
Written by FX Empire