USDCAD - Weekly - Bearish towards 1.0100

Trading in USDCAD was volatile last week with four of the five day’s direction countering the preceding one. This type of price action does not provide strong signals. However the net result was an almost unchanged close and while that does indicate the sort of indecision shown by the counter moves, the rejection of the week's highs and the fact that weekly RSI is giving negative signals advises a mildly downward bias. In view of this our call, and despite the concern provided by the proximity of a 38 percent correction point, is Cautiously Bearish below 1.0390. The immediate objective is 1.0151, the four-week low, and a move through that point should see the market focusing on 1.0100, half of May’s net gains, or even 1.0047, a broader 62 percent pullback.

The risk is that selling pressure is being overrated and this would be confirmed by a move up through 1.0390, the open from two weeks ago. Further gains would then target 1.0448, this year’s peak posted this month, or even 1.0525, last November’s top.