By Mohammed Isah, technical strategist and head of research at FXTechstrategy.com

USD/CAD: Having cut through its strong supports at the 1.0219/04 levels established in Oct. 2009 and Jan. 2010, respectively, after many months of price hesitation, threats of a return to parity (1.0000) have now increased.

This is premised on its continued weakness that saw it selling off through its psycho level at 1.0100 today. We envisage that level will present a significant support and should turn off the pair on initial tests. However, while it holds firmly below the 1.0219/04 levels, we look for 1.0000 to eventually break and drive USD/CAD toward its July 2008 low at 0.9818, with a break of there setting the stage for further declines toward the 0.9707 level, its Feb. 2008 low, and ultimately its 2007 low, at 0.9056.

Its weekly and monthly RSI are bearish and pointing lower, supporting this view. Conversely, on any recovery higher from its current price levels, the pair should target its "support turned resistance" at the 1.0219/04 levels, where a reversal of roles is expected to push it back down.

Further out, the 1.0320 level, its March 11, 2010 high, and its Feb. 22, 2010 low, at 1.0368, come in as the next upside targets. In a nutshell, the journey to parity (1.0000) continues to develop, having broken and held below the 1.0219/04 levels to resume its broader medium-term downtrend.

Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces The Professional Suite for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.

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