Outlook for USDCAD continues to point lower following its inability to follow through higher the past week. This development now leaves the pair vulnerable to the downside towards the 0.9890 level, its Oct 27'2011 high. However, it will have to decisively break and hold below the 0.9923 level to target the 0.9890 level. A breach of there will pave the way for further declines towards the 0.9804 level, its Sept 19'2011 low and possibly lower towards the 0.9779 level. Its daily RSI is bearish and pointing lower suggesting further weakness. Alternatively, the risk to our downside outlook will be a return above the 1.0049 level, its Feb 16'2012 high where a break will send the pair further higher towards the 1.0250 level and subsequently the.0317 level. This if seen will put on hold its nearer term weakness and then target the 1.0423 level, its Dec 14'2011 high followed by its Nov 25'2011 high at 1.0524. All in all, the pair remains vulnerable to the downside in the short term.
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