By Greg Holden – The US dollar has continued to plummet against most of its currency rivals this past week, with some now saying that a round of quantitative easing has already been priced in by speculators. The Canadian dollar has also been falling versus many of its currency counterparts, but interestingly it is reaching towards a 6-month high mark against the greenback.
In the chart below we can see that the USD/CAD pair has been falling for the past few months, but trading somewhat flat for the past half-year between 0.9960 and 1.0600. As the price approaches the 23.6% support level on the Fibonacci, traders should be able to determine the direction of the pair by its trading behavior over the next few days.
Other technical indicators seem to suggest an impending upward correction to the pair. The RSI on the chart below has the price just entering the over-sold region, suggesting a build-up in upward pressure. The Stochastic (slow) also appears moments away from a bullish cross, which supports the notion of an upward move.
So long as no major fundamental news causes a shift in value for either currency, the pair may likely see an upward correction after bouncing off the 0.9960 price level. Long-term buy positions appear to be beneficial for USD/CAD traders.
USD/CAD – Weekly Chart
Forex Market Analysis provided by ForexYard.
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