Daily Forex Analysis - USD to CAD Forex Chart

Forex Technical Analysis

Forex analysis of the USD to CAD daily chart is giving us some mixed forex trading signals at the moment, with Friday’s candle suggesting a bullish tone, whilst in contrast Thursday’s bar indicated a bearish sentiment in the market. If we start with Thursday, the wide spread down bar suggested a bearish engulfing pattern to forex trading for Friday, which failed to materialise with the session ending higher, and with the deep lower wick of the trading session indicating that the US dollar bulls controlled the session. The depth of this shadow suggests that we should see the USD to CAD rise  early in the trading week with the low of the session finding support just above the 1.08 level, a price point which has provided a bounce to the pair in the past, most notably in mid May. For any sustained move higher we will need to see a break and hold above the 1.11 price handle and should this be breached, we could see a move higher once again as US dollar strength returns to the forex market in the new quarter.

Fundamental Forex Analysis

With some countries closed for a national holiday on Monday, and therefore even thinner trading volumes, the focus for the fundamental news on the economic calendar will be the monthly GDP figures which are forecast at 0.2% against a previous of -0.5%. Canada is unique in that it is the only country to release monthly GDP data, all the others release theirs quarterly, and therefore the impact can be less muted at times as the changes from one month to another are less pronounced and therefore cause less of a surprise to the forex markets in general. The only other item of news in a quiet day’s trading is the Chicago PMI data in the US which is forecast at 47.4 against a previous of 43.4, which if achieved will add further evidence to the view that we are now moving out for the recessionary trough and into a long and sustained period of recovery.

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.

USD CAD Forex Chart 18 August 2009

Forex Technical Analysis

Yesterday’s rally in the dollar cad pair was somewhat muted given the sharp sell off in equities and commodities as the session ended on narrow spread up bar with a deep upper wick suggesting a move that lacks conviction, a view reinforced by the fact that the high of the day failed to breach the 40 moving average which seems to be adding some downwards pressure at present.  It is also interesting to note that the prices today failed to clear the minor support level at USD1.115 which remains intact at present and any sustained move higher will need to breach this level as well as cross the 40 day moving average.

Fundamental Forex Analysis

The only item of fundamental news on the economic calendar today for Canada is the Foreign Securities data which is forecast at 13.55bn, a figure that has been rising, month on month and if, once again, this number comes in better than expected should boost the Loonie.  Meanwhile in the US we have Building Permits, PPI, Core PPI and Housing Starts   and of these the two most interesting are the PPI which is expected to post a negative number at -0.2% indicating that deflation is still posing a risk, and Building Permits which the markets will be scrutinizing to see if the housing market has indeed reached a bottom.  In contrast to the PPI data both Building Permits and Housing Starts are expected to show a very small improvement over last time with Building Permits rising from 0.57m to 0.58m and Housing Starts from 0.58m to 0.60m.  However, forex traders may focus on whether the PPI does indeed come in at a negative number as this would signal a postponement of any rise in interest rates which would be bad news for the US Dollar.

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.