Nick Nasad
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USD/CAD: 1.12 Barrier Broken, 1.16 Next?

The USD/CAD, after being rejected at 1.12 earlier in the week, managed to force a breakout in today's NY morning session. 

The move can be an important technical signal that despite the strong gains seen already in this pair in January, it could be ready for further gains. In the short term, let's look for a pullback to 1.12 and see if it changes its role from resistance to support.

Looking at the long-term picture, the USD/CAD was as high as 1.30 in 2008/2009, so a sustained move could gather even further momentum that seen so far.

My upside target in this pair then is the 1.1670 area if we continue to see the USD strong and the Bank of Canada shows signs that it may cut rates if economic data comes in on the soft side in the Canadian economy.