USD/CAD: Potential For a Swing Lower to 1.0500
USD/CAD continues to meet strong resistance close to the 1.0700 region, threatening a longterm break under the support of the rising channel which has been in place for the last three months. Combined with substantial long speculative positioning, there is scope for a squeeze lower. Should this occur, support would be anticipated close to the 1.0500 region.
Longer term, the strong resistance at 1.0870 (02/11/2009 high, see also the long-term declining trendline from the October 2002 peak) continues to represent a major hurdle. Therefore, a break of this level is needed to call for further long-term strength.