USDCAD: There are three major developments taking place on USDCAD, which suggest that a significant rally in the coming days and weeks is likely.
1. The trend support form the all time low in Nov ’07 has provided support over the past week and is still very much in place and currently comes in at 1.0069.
2. Both of the moving averages (55 and 200 day) converge with each other and the trend support at 1.006, just below the current price.
3. The pair has twice retraced to the 76.4% Fibonacci retracement levels on the daily chart. Once last week (of the rally from 17 April low to 23 April high) and again this morning at 1.0086 (of the rally from 30 April low to 2 May high). A breach of 1.0232 (55 wma) would again add to the bullish view.
EURCAD: The 55 dma at 1.5636 has been tested and has provided support today. The pair appears to be bouncing back so far and a failure to close below the 55 dma would argue that the market could rally back and possibly test resistance levels at 1.6256/66 and 1.6324.
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