TD Securities - "USD/CAD closed a bit sluggishly last night as the market struggle to maintain the positive traction seen earlier in the session but this is no real impediment to the firmer USD/CAD undertone. The bid for funds has returned so far today and we generally think is likely to be the way this market functions for the moment—that is to say modest losses will be more or less easily absorbed by willing buyers on modest dips. We say this because 1) the market has made some clear progress through some important resistance points in the past few days, sustaining the uptrend as the market carves out successive higher highs and higher lows (the hallmarks of a bull trend) and 2) trend momentum oscillators are bullishly aligned across a range of time frames. This gives us a high level of confidence that the move up can extend. Support is firm at 1.0050/1.0100.
The USD has strengthened through 1.0135 (61.8% retracement of the 1.04/0.96 decline last year) so far today. A firm close will support the impression that this market will continue to grind higher towards 1.0250 (76.4% retracement) or higher. We think the rally/consolidation/rally picture of the last 6 months is a bullish structure (bull flag) which puts the low 1.03 zone as the measured move target. Daily support points echo the short-term levels noted above. Daily trend momentum is bullish."