The weak close and strong downside momentum should put pressure on the USD/CAD on Thursday with the potential to drive this market into a retracement zone at 1.0071 to 1.0011. Sell a rally into 1.0213. Look for a buying opportunity at .9998.

The overall weakness in the U.S. financial markets triggered a rally in the AUD/USD. The reversal up should have a follow through rally on Thursday. At this time, the market is ignoring the economic fundamentals and focusing on the U.S. financial crisis. Traders are seeking the safety and the higher yield of the Aussie.

The market found key support inside of the major retracement zone at .9497 to .9457. Based on the low at .9475, look for a possible retracement to .9572 to .9594. Downtrending resistance is at .9588, making .9588 to .9594 the best selling resistance cluster.

Traders sought the safety of the New Zealand Dollar on Wednesday as bearish Freddie Mac and Fannie Mae news drove this market higher. Traders seeking a higher yield with less risk also bought the Kiwi. The market ignored the economic fundamentals on Wednesday, and instead traded by the news. Support is at .7540. Look for resistance at .7602. A breakout over this price could set up a rally to the last main top at .7664. Watch for the breakout to the upside to attract new buyers as this would be the first change in trend to up in several months.

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