USD/CAD Technical Analysis October 11, 2011
The Canadian dollar appreciated against the Greenback on Monday as trader bought risk around the globe. One of the most heavily bought areas was in the energy sector, especially the oil markets. With this in mind, it is no surprise that the Canadian dollar rose against the Dollar.
The market did fall just down to the support level in the same range we have been watching as a potential buy area. The daily candle does look very bearish though, so we feel that a continuation of the dip could be coming. However, we feel that there are simply far too many reasons to sell the Loonie at this point, and that the pair will likely continue its climb over the next several days.
We are currently looking for a hammer or other such bullish candle in the neighborhood of 1.03 to 1.02, and think this could be a good launching point for more strength. We think that the “bottom” area is the parity level, and a break below that signals continued selling. The overall trend is still down, but we also feel that a massive bounce could be coming as well. We like buying supportive candles at this point.