USDCAD: We continue to retain out bullish bias on USDCAD despite its present price hesitation. As long as the pair continues to retain most of its recovery strength started from the 0.9445 level in early May’2011. While the 0.9709/20 zone hold as supports, our upside view remains valid.
A cut through the 0.9800 level and the 0.9845 level will set the stage for additional strength towards the 0.9967 level, representing its long term falling channel top (visible on the weekly chart). Its daily stochasticsis bullish and pointing higher supporting this view.
Alternatively, in case of a pullback, the 0.9709/20 zone will be aimed at ahead of its May 20’2011 low at 0.9639 where a break will open the door for further declines towards the 0.9511 level, its May 11’2011 low. We expect that level to hold and turn the pair back up, but if it snaps, the 0.9446 level, its 2011 low will be targeted.