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

Our outlook on USD-CAD is still for a move lower toward the 1.0144 level, its March 22, 2010 low, after failing at the 1.0301 level. A cut through there will allow for more downside weakness toward the 1.0100 level, its psycho level ahead of the 1.0059 level, its 2010 low and then its big psycho/parity level at 1.0000.

We expect a breather on an initial test of that level to turn the pair back up and possibly trigger a corrective recovery higher. However, on a violation of that level, we will be looking for a push toward its July 2008 low at 0.9818 and then the 0.9707 level, its February 2008 low.

Its daily stochastics is bearish and pointing lower, supporting this view. On the other hand, to forestall the above from occurring, a decisive clearance of the 1.0219/04 levels and the 1.0301 level, its March 26, 2010 high, must be established to create scope for more corrective recovery toward the 1.0320 level, its March 11, 2010 high and then its Feb. 22, 2010 low at 1.0368.

A halt should occur and turn the pair back down in line with its larger downtrend at that level. Its daily RSI is bearish and pointing lower, supporting this view. Overall, the journey to parity (1.0000), though currently on hold, should resume, after ending its corrective to consolidation phase.
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.