We have been on a bit of a blog vacation ourselves, but Patrick and I are back in action.  Clearly there has been a signifcant U.S. dollar weakening against the Canadian loonie over the last month and with a key support broken at the 108 level, the window is open for an even deeper sell off. Currently the US dollar is attempting to do some backfilling, which is of no surprise, however all attempts to regain some ground against the loonie have been stopped cold with out so much as a measured retracement.  We have our eyes on the 108 level as a strong resistance. A move into this zone followed by a subsequent rejections will add further fuel to the down ward trend of the U.S. dollar. A break below 106.50 is likely to yield a test of the 103/104 zone, which puts us very close to the par level where the pair consolidated back between November of 07 and August of 08.  A move back into the the 108 zone with a decisive close above 109 is likely to light a fire under the U.S. dollar bulls, fascilitating a more robust recovery.

To check out our chart analysis and key focal zones as well as a brief commentary, please click on the link below.

http://www.optionsource.net/mediaplayercanadian.php

For more information on USX options, click on the following link.

http://www.m-x.ca/produits_options_devises_en.php

All the Best

Jason Ayres