The USD/CAD has broken the low from August 28, 2011 and now has a pretty clear shot at the July 2011 low with only one real support level to stop it. The Support level at 0.9628 +/- a few pips, is really all that stands between the current low of the Asian session 0.97129, and the 2011 low of 0.9406. If that level is breached we could see the Loonie soar in value compared to the USD Greenback which would send the pair down to retest the 2007 low a of 0.9056. While there are certainly calculated levels of support on the way down such as the Monthly S2 at 0.9686 and Weekly S2 at 0.9668, the main level is the 0.9628 area. To the upside we have resistance now at the Weekly S1 which was breached during Asian trading at 0.9725 and the Monthly S1 at 0.9772 which was taken out on Monday after a short pause at that level. While there are no major canadian fundamentals to consider, there are numerous events affecting the USD in the near future including the Unemployment numbers and the FOMC statement on Thursday. If the Greenback gets a boost from the upcoming fundamentals we will likely see the pair retrace to around 0.9850 before falling again later on. The Canadian Economy is considered one of the strongest in the world at the moment, with boosts in prices for its natural resources such as oil, it could easily continue to strengthen and push the USD/CAD lower.
Happy Trading!