With last week’s hammer candle now duly confirmed on the daily chart, the usd to cad pair continued to trade lower yesterday once again, ending the trading session as a wide spread down candle with small wicks to both top and bottom. The key analysis from yesterday’s price action was the resistance now apparent from the 9 and 14 day moving averages, which both presented a solid object to any move higher, and with all three moving averages now adding further pressure, the usd to cad is likely to break below the minor floor of support in the 1.04 price level in the short term, and then to retest the major potential support level at the 1.02 price point in due course. A break below here will lead the usd to cad down to parity which I also expect to see breached in due course, with the short term outlook remaining firmly bearish once again following yesterday’s price action on the daily usd to cad chart.
With no items of fundamental news for Canada today the markets will be looking to the ADP employment figures and crude oil inventories. The predictive accuracy of the ADP should not be underestimated, especially with the non farm payroll numbers due out on Friday. The ADP forecast this week is -143, an improvement on the previous. Meanwhile crude oil inventories are seen as decreasing by 0.4m barrels.
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Support & Resistance for USD to CAD :
S1: 1.0387 R1: 1.0559
S2: 1.0311 R2: 1.0655
S3: 1.0215 R3: 1.0731
