DAILY FORECAST FOR USDCAD 13th August 2009

Bias: Watch for the risk of further sharp losses

Daily Bullish:

While price fell 10 pips short of the 1.1083 resistance I feel that the decline from there probably implies the end of the correction. The pullback has been quite shallow which is quite normal for this pair. Thus only a break above the 1.0934 high would cause follow-through but there is close resistance at 1.0961 and then 1.0987-97 which I feel would cap for a reversal lower. Only above 1.1000 would threaten a retest at 1.1073-83 again.

MT Bullish:

11th August: We saw a rally to the 1.0933 swing high and although I expect a pullback lower today I feel that there is probably potential for the upside to reach 1.1083 and possibly 1.1177.

Daily Bearish:

The reversal from 1.1073 was very sharp and this does highlight the possibility that we'll see another push lower today. For the moment we remain in 1.0860-1.0930 consolidation and if this breaks lower directly then I would not be surprised to see another sharp move lower. There is minor support along the way at the 1.0849 low and then 1.0780 but I feel there is every chance we'll see 1.00676-95 at least - possibly back to the 1.0630 low.

MT Bearish:

13th August: Cautiously I feel the correction has ended and thus we'll be seeing continued losses back to the 1.0630 low and probably beyond.

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