USD/CAD Forecast December 20, 2011, Technical Analysis

USD/CAD had a volatile session on Monday as the market closed in an unchanged manner. The range was somewhat extended, but the more important fact is that the 1.03 level has continued to hold as support. The chart looks bullish, and the oil markets are looking weak. As oil wells off, the Canadian dollar does as well. The 1.05 level looks to be resistance in this pair, and the 1.07 level above it should be as well. The braking of the 1.05 leads to the 1.07, and the breaking of the 1.07 level leads to the 1.10 level. The pair looks ready to rally, but there is a lot of pressure to the downside in this pair, so it will be more of a grind than a run. We buy dips as long as we stay above 1.03 or so. We are not selling until we get below the 0.99 level in this pair.