Looking ahead

Is parity for the dollar/Canada in the cards anytime soon? Woolfolk projects a move to parity in early 2008, which could mean an end to the blistering retreat in dollar/Canada action over the near term. He targets 1.0500 as a year-end objective. Brian Dolan, chief currency strategist at Forex.com says recent action in dollar/Canada has been a straight line. His view is that the trend has become unsustainable.

“I’m expecting it to turn around in the not-toodistant future,” he warns. He sees the potential for a corrective bounce from the 1.0750 zone. “That’s an area to cover shorts and try small longs,” he says. From there, Dolan sees resistance first at 1.1170, then $1.1300 (near and intermediate term). A bounce toward those prices, however, could represent selling levels, Dolan says. IFR Market’s Coleman pointed to the declining trendline on the daily chart in place since the end of March. He saw trendline resistance in the neighborhood of 1.1050. “If we go above that, cover shorts,” he says. “Otherwise the trend is your friend.”