If we were to break down below the 1.31 level, then it’s possible that we could see the market dropping down to the psychologically important 1.30 level. That being said, you should also pay close attention to the fact that the market had broken out of some type of rectangle, between the 1.33 level in the 1.38 level.
In other words, the “measure move” should be 500 pips, meaning that we could drop down to the 1.28 level before it is all said and done.again, unless of course we break above the 200-Day EMA, which is closer to the 1.3375 level . All things being equal, if we were to break above there, the market is likely to go looking to the 1.3650 CAD level., and it’s probably worth noting that oil has been trying to sort itself out lately. We have seen a certain amount of strength in the crude oil market, so that of course helps the Canadian dollar itself. It’ll be interesting to see how this plays out, but all things being equal, the technical analysis does suggest that we are going to continue drifting lower.