DAILY FORECAST FOR USDCAD 7th May 2010

Bias:    I see losses to the 1.0440-63 area before recovering…

Daily Outlook:

We reached the 1.0482 resistance and then some… The follow-through to the 1.0741 high was aggressive and hasn't ended. However, I'm not sure we'll see a direct rally to new highs. Support is at 1.0440-63 and I look for this to support and generate a recovery back into range at the very least which should reach the 1.0675-00 area at least. Take care as while this sort of area caps we could see continued consolidation. Above 1.0700 and then 1.0741 would extend gains directly....

Only below 1.0440 and then 1.0377-00 would provoke an earlier reversal lower…

Medium Term Outlook:

7th May:      In some ways I am happy with the higher target as it adheres better to normal trending ratios. Thus, while 1.0440-63 supports there is risk of follow-through above 1.0741 and possibly closer to the general 1.1000-60 area...

Therefore, only below 1.0375 would reverse the bullish structure...

For a full description of how to use the analysis please see the Analysis page of my website. The prior day's set ups for potential trading levels highlighted in the report are available on the Daily Forecast page of my web site in the Trader Package review.