USD vs CAD - Daily FX Chart 6th May 2006
With a host of important fundamental news on the economic calendar for both the US Dollar and Canadian Dollar today it is not surprising to that many currency traders banked their profits yesterday in advance of today’s busy calendar, and are now waiting on the sidelines for the news releases to start. From a technical perspective yesterday’s candle ended the day on a small doji suggesting that we may well see a squeeze higher in the next couple of days and possibly helped by some of the news items due for release in the next 48 hours, and any short term reversal will provide us with excellent opportunities to build further short positions with a longer term view of the dollar cad moving lower in due course.
Items of interest for the Canadian Dollar include building permits, the IVEY PMI data, crude oil inventories, and in the evening a speech by Bank of Canada Governor Mark Carney who is due to testify before the Senate Committee on Banking, Trade and Commerce in Ottawa. All these items of fundamental news are considered red flag and therefore important enough to move the markets. Building permits data is forecast at 2.4%, a dramatic improvement on last month’s figure of -15.9% and if this is anywhere near forecast should help to strengthen the Canadian Dollar. IVEY PMI is a diffusion index based on a survey of purchasing manager and is generally considered a leading indicator with any number above 50 indicating an expanding economy whilst below indicates contraction. The forecast is for a worsening from last month’s 43.2 down to 41. A mixed picture for Canada. Although crude oil inventories are expected to show yet another increase yesterday API did show a decrease so we could see a surprise today.
My trading suggestion for today is to sit on the sidelines until all the data has been released to see how far the short squeeze is likely to extend.
You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links. I have also included details on an excellent ECN broker.
