USD vs CAD - Daily Forex Chart For Spot Price 5th May 2009

With yesterday’s forceful breakout rampaging through the 1.18 price point detailed in yesterday market commentary for the usd to cad there is now nothing to prevent a rapid and further move deeper to re-test the 1.15 region and beyond, and this should now be our next target for the long drop.  However, given the sharpness and speed of the decline it would not be a great surprise to see some temporary profit taking and a squeeze higher in the next few days before the downwards move continues apace, with the 1.18 region now providing strong resistance to any attempt to reverse higher in the short term, and we could not be seeing the first stages of an attempt to revert back to parity so for position or longer term traders this may be the opportunity they have been waiting for.

With no fundamental news on the economic calendar for Canada until tomorrow the only items for today are in the US and these could provide the basis for a short squeeze especially the non manufacturing ISM PMI data which if it comes in better than expected should be positive for the US dollar.  My trading suggestion is to continue to build short positions but be aware of major news items today and later in the week including the results of stress tests on the banks and, of course, NFP (non farm payroll) on Friday.  I would use all of these to look for entering the market on any up-bars.

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.