The loonie is at a very interesting point
Time to take a much wider look at USDCAD and we can see we're up at some important levels
USDCAD monthly chart
We've been edging up to the 1.30 level and aside from looking like a very strong level tech wise, it's a big psychological level too
The series of highs through 2008 & 2009 range from 1.2984 through to 1.3065 and we had 4 attempts over 7 months at the level
USDCAD monthly chart
Staying in the area the buyers built up and built up their positions to take the level on but in the end they failed and the result from there was obvious. Of course there were many other events to move the price, not just because buyers gave up
So here we are again after the BOC cut once again. That's given the market some added impetus to go along with the expectations for Fed rate hikes
I'm toying with a short up here but I know that's fighting against the grain and fundamentals. I can very rarely resist a big technical level like this though. If this level is to really break we'll need to see the whole area cleared out and I'd be satisfied of that if we move through the highest high at 1.3065 and then 1.31, to be on the safe side. Should we do that then we have a clear run up to the 61.8 fib of the Jan 2002 fall at 1.3467. I will also be keeping an eye on that with a view to a short
With big long term levels like this you have to give it some room so 20 pips stops aren't likely to help. That's why I want to see 1.31 go before I'm happy that we've broken through
Earlier I put up an article from Mitsubishi on the possible effects to the dollar after the Fed raise rates the first time. I have lingering thoughts that Canada won't be too far behind and that because they've now cut twice this year, they may well have to quickly play catch up
While I like the look of the tech here and now I think that this pair will be a fantastic short after the US hikes to position for Canada to start hiking
