USD/CAD prepares for retracement

Despite toughness of the resistance zone formed by the highs seen in September of 2009 and, most importantly, by the 17-month up-trend line, USD/CAD still launched an attack on 1.1023/00. Nevertheless, the currency pair is not expected to maintain its upward momentum for long. Instead it is more likely to commence a bearish correction with the monthly R2 at 1.0814 as the target.

The market is becoming concerned regarding the future perspectives of USD/CAD. And while the share of longs (60%) remains quite stable, the portion of the sell orders placed next to the current trading price is constantly increasing. Right now 82% of them are to result in a sell trade, if triggered.