USD to CAD 31st March 2009 - Daily Chart
As I suggested in yesterday’s post the weekly hammer candle in the usd to cad chart did indeed provide the impetus for yesterday’s wide spread up bar which closed above all three moving averages but just failing to breach the 1.2650 region and closing marginally below on the day. This is a significant area as it is a relatively strong area of resistance and for this move to continue we will need to see this broken in the next few days and it is interesting to note from this morning’s trading that this level has held once again but whether this continues to be the case for the remainder of the day, we will have to wait and see.
Items of fundamental news on the economic calendar relating to the Canadian Dollar included the GDP, RMPI and IPPI of which the first was the most significant and which came in worse than expected at -0.7% against a forecast of -0.6%. This indicated an economy in contraction and indeed was the sixth straight month in a row that we have seen such figures being released largely as a result of a slump in car production and falling construction activity. Manufacturing fell by 3.1% as a result of fewer cars being produced and construction fell by a similar figure of 3.0%. As the 8th biggest economy in the world Canada is now facing its first recession since 1992, a situation not helped by falling exported commodity prices such as oil. This was followed by the RMPI which is an acronym for raw materials price index which came in substantially better than expected at 1.7% against a forecast of 0.2%. This is generally considered a leading indicator as higher costs are generally passed on directly to the consumer. The final data set was for IPPI which is the industrial product price index which came in on target at 0.4%.
We now await the Chicago PMI data and, more importantly, the CB consumer confidence figures for the US which are due out shortly which are covered in more detail on my euro to dollar site.
My trading suggestion for today remains the same in that we may have to wait a few more days for any bearish pattern to resume but that there is still some momentum left from last week’s hammer candle and you will find possible trades in the 5 and 10 minute charts. Remember to buy on any dips and, in particular, look for hammer candles to go long and shooting star candles to exit.
In the meantime you can keep up with all the latest live currency charts, latest currency news and fundamental news by simply following the relevant links. Also you are looking for a good ECN broker again just click on the link.
