USD/CAD Forecast for the week of December 10, 2012, Technical Analysis

The USD/CAD pair fell below the 0.99 support level on Friday as this market finally broke down a bit. However, we are not below the trigger point of 0.9875, and as a result we are still within the “margin of error” for this consolidation area. With this in mind, we are more than willing to start shorting this pair on a break below the low of this past week candle, as we think it could signify a move down to the 0.97 level. This would be a “risk on” type of trade, so good news involving the fiscal cliff could be a nice catalyst for this move. As for buying, we are not interested until we get above the 1.0050 level.