USD-CAD Trends Downward

NEW YORK (TheStreet) - In our weekly analysis, we highlighted the possibility of further weakness in the USD-CAD and a break below the 0.9927 level. Well, that has occurred as USDCAD is now trading below the 0.9927.

Our focus now has turned to its May 2008 low at 0.9818 on further weakness. A violation there could signal a move to its 2008 low at 0.9707. Both the daily and weekly RSI are bearish and support this view.

On the upside, a break and hold above the 1.0207 level will have to occur to reverse its present downside threats and bring upside gains towards its long-term falling channel top at 1.0268.

USD-CAD could encounter a stiff resistance and turn back lower in its primary direction again. However, if that level snaps, its October, 2010 high at 1.0372 will be targeted ahead of the 1.0672 level, its September 3, 2010 high.

Overall, as a result of a sharp selloff that is seeing the pair getting taken out at the 0.9979/27 levels, risk is developing, signaling further weakness.

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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