USDCAD trading this week continues to consolidate inside Friday's range with rallies sold and dips bought, resulting in a sequence of 4 days yielding little net change. But buying pressure has emerged from Thursday's low and although a break of Tuesday's high of 0.9996 is needed confirm the upside momentum, the bias is assessed to be mildly bullish going into today. In view of these facts our call today is a cautiously bullish above 0.9944.

The pair couldn't hit SMA 100 and started to show a slight bearish tendency as seen on the provided daily graph. Meanwhile, trading continued above the pivotal support of 1.3230 and also above SMA 50. The bearish picture will not come back into focus unless we witness a daily closing below the aforesaid level. The contrarian between the above mentioned factors forces us to stay aside over intraday basis until an actionable setup presents itself to pinpoint the upcoming big move.

The pair has achieved one more daily closing above the initial resistance of 1.3225-1.3230 suggesting that the bullishness will continue over intraday basis. SMA 100 becomes a technical objective followed by the next key resistance around 1.3415 zones. Stochastic also remains positive reinforcing our constructive outlook. Only a break below 1.3125 will give us a reason for concern.

The USD/CAD respected the declining channel resistance the last couple of times, but since finding support at 0.9927, its momentum has gotten flat. The 1H chart shows the RSI reading stuck between 40 and 60, reflecting the neutral and consolidation momentum. Today, a sharp attempt to break the declining channel resistance resulted in a quick rejection as the RSI also tested 60. If the market is to find a bottom, the RSI should rally above 60, but if the market is in bearish continuation, it should fall below 40.

The daily closing above the initial resistance of 1.3225-1.3230 succeeded in drawing a bullish candlestick pattern -long white candlestick- as seen on the provided daily chart. Now, SMA 100 at 1.3335 followed by 1.3375 become technical objectives for the upside momentum seen yesterday. Moreover, Stochastic has fixed its negative sign seen during the past 10 days. In result, potential upside move might be witnessed today but we should be careful as a break back below 1.3125 will bring the negative picture back into focus.

The USD/CAD has been persistently bearish as seen in the 4H chart trading in a declining channel. The RSI has been held under 60 and has been able to tag 30, reflecting the continuous bearish momentum. As we gear up for the 2/7 US trading session, the pair is trading at the resistance trendline of the declining channel. A break above parity (1.0) will be a clear sign of a bullish breakout. It will also break the 100 simple moving average in the 4H chart (200SMA in 1H chart).

SMA 50 continued representing a hard technical obstacle that prevents the pair from collapsing as seen on the provided daily chart. We added Keltner channel to our graph where we can see how trading is stable below the middle line of the indicator. Meanwhile, Stochastic and OsMA remain negative; thus, we keep our bearish overview unchanged over intraday basis. A break below 1.3045 will trigger panic sell-off actions.

After the European Commissioners have recorded only sluggish progress in implementing the assumed reforms and austerity measures as part of the European rescue fund, the European heads increased the pressure on the Greece government. Recently, the international lenders demanded increasingly for fixed terms to avoid a bankruptcy of the nation. Therefore Greek Prime Minister Papademos negotiated again with the opposition parties concerning further spending cuts and a strengthening of the domestic economy, while the European finance chiefs expressed that a payout of a further bailout tranche remained doubtful. As a result, Greece would have no other choice as a declaration of bankruptcy. Currently, the focus turned to the expected agreement of the Greece government and the private creditors concerning debt cuts, while the ECB is preparing for bolstering Greece's next rescue program. The EUR weakened 0.3 percent to 100.46 against JPY and tumbled 0.6 percent to 1.03085 versus the USD, while the USD gained 0.2 percent towards the JPY and was at 76.77 JPY after climbing 0.5 percent before. According to the Bloomberg Correlation-Weighted Indexes, the EUR recorded the worst performance among the tracked currencies and has dropped 4.7 percent in the past quarter. In contrast, the JPY increased 3.2 percent and the USD was able to rise 1.1 percent.

The pair has moved bearishly since the opening of the week where it came below SMA 50 over four-hour interval as seen on the secondary image. Over daily studies, the negativity continued appearing on Stochastic and OsMA and thus; the bearishness is still expected during this week. A break below 1.3070-1.3050 zones will accelerate declines softly targeting 1.2925 followed by 1.2870-1.2860. Our risk limit resides in the areas between 1.3340 and 1.3375 zones.

Anytime we get above forecast and above 200K employment change and decline in unemployment, we get welcoming sign for the US economy. Risk appetite usually leads to pressure for the USD. Indeed we saw that against the commodity currencies like USD/CAD, AUD/USD and NZD/USD where dollar weakness was apparent right after the release although there has not been a follow through yet in the following hour.

The potential bearish classical pattern discussed earlier remains valid while the pair is gradually approaching its neckline as seen on the provided graph. SMA 50-colored in red- becomes closer and is valued at 1.3110 where a break of which will weaken the neckline of the pattern. MACD traditional is definitely negative reinforcing the bearish scenario. Note that, choppy trading may continue as traders are waiting for NFP data from US today.

Economists have the opinion that Greece may stay permitted with too much debt, too little economic growth and too large a budget hole to do without yet more aid that euro nations led by Germany are less and less to offer. This means deeper spending cuts required for extra loans of at least 130 billion euros and domestic resistance to renew the economy risk limiting the impact of any second aid package, the economists say.

The Loonie has slowly grinded higher relative to the USD over the past few weeks (thus USD/CAD lower) alongside the strong 'risk' rally during the month on January. However, USD/CAD is approaching a key technical convergence zone around 0.9960/65 -; Sees the 200-day sma (blue) as well as the 1:1 equidistant measured move (grey). Consequently, this could make for an ideal time for the USD to make a late-round comeback and KO the CAD. However, daily RSI has already broken below the key 40 level which is a potential blow to a USD recovery.

The key resistance level of 1.3230 succeeded in preventing the pair from achieving more bullishness as seen on the provided daily chart. Our yesterday's caught bearish classical pattern-check the previous reports- remains valid so long as the pair remains below the high of the right shoulder at 1.3215. Those technical factors are rational reasons to suggest a bearish scenario over intraday basis. A break back below 1.3080 will accelerate while 1.3375 should protect the bearish direction. Finally, technical indicator's signals reinforce the scenario until now.

The initiative is likely to be implemented on a voluntary basis by national central banks, said the officials, who declined to be identified because the information is strictly confidential. Germany's Bundesbank has implied it may be among those to avoid the measure, reason for that is the country's banks do not need to borrow more from the ECB. An ECB spokesman declined to comment. The ECB is trying to improve funding access for banks in debt crises nations by widening the pool of eligible collateral at its market operations to include more bank loans. Estimates of the Citigroup Inc. assume that the total store of loans that could be used in market operations may be more than 10 trillion euros. While the ECB already accepts some credit claims, policy makers are trying to build on the success of their three-year loans to institutions and further calm down the euro area's financial system.

While USDCAD is trying to stage a recovery having held above the 1.0000 level, its big psycho level and its Tuesday low at 0.9964 level, it still remains susceptible. This will leave the pair targeting the 0.9890 level, its Oct 27'2011 high. Both its daily and weekly RSI are bearish and pointing lower suggesting further declines.

Adopting a favorable action to yesterday's technical comment, the pair has plummeted sharply attacking SMA 50. Moving to the four-hour graph, we can see how it has drawn a reversal classical pattern breaching its neckline areas while MACD traditional and RSI are giving off negative signs. Thereby, the bearishness may continue over intraday basis and targets are well seen on the provided graph. Only a break of 1.3230 will give us a rational reason for pause.

The German Chancellor Angela Merkel voiced frustration with Greece’s failure to carry out an economic overhaul. International Monetary Fund and EU officials are in Athens thrashing out budget measures that would unlock the aid needed to keep the government functioning. Leaders left a Brussels summit late yesterday with no agreement over how to stop Greece’s widening budget hole and no announcement of how deep the need is. Merkel said in an interview that Greece’s debt sustainability is especially bad and they must have to find a way through more action by the Greek government, more contributions by private creditors, for example, in order to close this gap. This summit was the 16th in the two years since the Greek debt emergency provoked an Europe wide debt crisis, leading to unprecedented aid packages for Greece, Ireland and Portugal and shake European faith that the common currency was not indestructible. After the meeting of leaders, EU President Herman Van Rompuy convened Papademos and European Central Bank Executive Board member Joerg Asmussen, to discuss the next steps on Greece. The EU President said that it is important to put the current program back on track and said finance ministers will try to hammer out the follow-up plan introduced in July in coming days.

The pair has been able to touch the SMA 50 which provided it with some kind of support during the Asian session. Thereby, the pair retraced mildly upwards but it is still trading comfortably below the key resistance levels between 1.3230 and 1.3250. At the same time, Stochastic continues showing overbought signs suggesting that the pair is currently gathering the momentum it needs to breach through SMA 50. To recap, our bearish scenario remains intact so long as SMA 100 at 1.3375 holds as a risk limit.

The Prime Minister said yesterday on French Television that he want to do is provoke a shock to set an example. Further he said, that there is no reason why deregulated finance, which brought us to the current situation, can't participate in the restoration of our accounts. The financial transactions tax is one among various measures Sarkozy unveiled to reduce the French budget deficit and to create an economic boost. He is also increasing sales taxes and levies on financial incomes to fund a 13 billion-euro cut in payroll charges aimed at reducing labor costs and making France more competitive. The French Banking Federation said in a statement, a tax that's limited to France would weigh on growth, lead to a loss of competitiveness, and create a heavy handicap for the financing of the French economy. The European Commission in September 2011 propose a tax of 0.1 percent on equity and bond transactions and 0.01 percent on derivatives, this could be a monetary revenue of 55 billion euro a year. European Union finance ministers are set to discuss the levy in March.