USDCAD: Reverses Gains, Eyes The 0.9926 Level.

USDCAD: Outlook for USDCAD continues to point lower following its inability to follow through higher on the back of its previous week gains. This development now leaves the pair vulnerable towards the 0.9926 level followed by the 0.9890 level, its Oct 27’2011 high. A breach of there will pave the way for further declines towards the 0.9804 level, its Sept 19’2011 low and possibly lower. Its weekly RSI is bearish and pointing lower suggesting further weakness. Alternatively, the risk to our downside outlook  will be a return above  the 1.0051/74 levels where a break will send the pair further higher towards the 1.0250 level and then the.0317 level. This if seen will put on hold its nearer term weakness and then target the 1.0423 level, its Dec 14’2011 high followed by its Nov 25’2011 high at 1.0524. All in all, the pair remains vulnerable to the downside short term.

EURUSD: Losses Upside Momentum, Susceptible

EURUSD: The pair remains susceptible to the downside and may return to its last week low at 1.2975 following a lower close at the end of the week.Below here will extend weakness towards the 1.2856/75 level, its Dec 29’2011 low/Jan 2011 low. Further down, support lies at the 1.2624 level where a loss will resume its medium term weakness and aim at the 1.2587 level, its Aug 2010 low. Alternatively, EUR must break and close above the 1.3322 level to annul its present bear threats and then target the 1.3375 level, its Dec 12’12 level. On further price extension, EUR should aim at the 1.3484 level, its Dec 05’2011 high and possibly higher towards its Dec 02’2011 high at 1.3547. All in all, EUR continues to retain its bullish corrective recovery tone despite its present price hesitation.