US dollar to Canadian dollar - Daily FX Chart 12th May 2009
Yesterday’s up bar came as little surprise to the market given the velocity of the dollar cad fall in the last few days and as a result provided plenty of opportunities to open further medium term short positions in anticipation of the downward momentum continuing in due course. With all three moving averages pointing lower and with little in the way of support underneath this currency pair which are virtually in free fall it seems increasingly likely that we will see an attempt to re-test the 1.15 region shortly followed by a move due south into the 1.1 price area. The continued US dollar weakness is highlighted in the dollar index which is adding to the momentum currently being seen in this and many other currency pairs, and with generalised US dollar weakness forecast for the next few weeks (if not months) this trend looks set to continue.
The key fundamental news on the economic calendar for today in Canada are the Trade Balance figures due for release shortly and forecast to come in at 0.5bn against a previous of 0.1bn. If this forecast comes in on target or is bettered then this could be good for the Canadian dollar, but do bear in mind that simultaneously we have the release of the US figures for their trade balance which is forecast to show an increase in imports from -26bn up to -29.2bn which again would be positive for the Canadian dollar.
My trading suggestion is therefore to sell into the market on any up move today and look to hold these positions for the medium term adding to them as we move below 1.15 and moving your stop loss accordingly.
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.
