The USD/CAD pair has further upside potential

Forexmentor.com Forex Trading Price Action

Well, well, well … remember last week I talked about 1779 as being a good level to set a buy stop at, just in case Leg Two of the supposed Uptrend Continuation Pattern kicked in? Guess what? Leg Two finally arrived yesterday afternoon in a blaze of glory. Of course, you all had your buy stops in place, right? Right! Way to go people!

Oil prices are still way down, at historically low levels – as is the Canadian dollar. This augers well for further upside potential for the USD/CAD pair – given how the loonie is paired as the second currency of the two currencies. The trend on the weekly chart is clearly up. We must keep a close eye on this as, at some point, the swoon in price will come to an abrupt end. A lower Canadian dollar means that manufacturers are now better able to compete on the world stage. That said, the Canadian economic scene is still fragile. Oil prices could rebound, if weather in the East turns ugly. Canada is a net exporter of oil.

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