USDCAD pushed higher through the longer term flat resistance line at 0.9800 and even briefly through the shorter term area close to 0.9850 recently, but failed to hold higher. Now the pair is beating a retreat to basic retracement levels. As this is a retreat from a counter trend rally, the focus will be on the deeper retracement levels, like the 0.618 Fibo at 0.9719 or even the 0.764 at 0.9686.
The recent 0.9860 high sets an important wave top and resistance level that is the next focus if the pair turns around and rallies again, with the 200-day moving average moving back down towards the psychologically pivotal parity level. The inability of the pair to hold more firmly below the resistance has softened up the downtrend a bit.
John J Hardy,
SAXO BANK