USDCAD - Its corrective recovery rally ran into a hitch above its strong resistance at the 1.0219/04 levels, its 2010/2009 lows and subsequently collapsed to close flat on Monday. However, a bid tone is now seen suggesting a challenge on the mentioned resistance and even its Monday high at 1.0240 level could occur. A convincing break above those levels will call for more upside gains towards the 1.0320 level, its Mar 11'10 high and then its Feb 22'10 low at 1.0368 where we expect a cap to turn the pair back down in line with its larger downtrend. Its daily studies are bullish and pointing higher supporting this view. Alternatively, if the mentioned price hesitation continues to be seen, risk of a decline towards the 1.0100 level, its psycho level could develop with a breach of there targeting the 1,0068 level, its 2010 low and then its bigger psycho/parity level at 1.0000. We expect a breather on initial test of that level to turn the pair back up possibly triggering a corrective recovery higher. However, on a violation of that level, we will be looking for a push towards its July'08 low at 0.9818 and then the 0.9707 level, its Feb'08 low.

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