Archive for forex trend

USD vs CAD 6 May 2010

Thursday, May 6th, 2010

USD CAD Chart Range 6 May 2010

Having duly achieved parity in the last few weeks and tested 0.95 as a result, the dollar to cad pair appears to  have reached the end of this particular cycle as it now attempts a longer term recovery and move higher.  Technically the rounded bottom of April and May suggests a solid platform of support and in the last 2 days we have seen the dollar cad break through an initial level of resistance between 1.02 and 1.028 as it continues its path higher marginally touching 1.04 in early trading this morning.  The short term moving averages are now beginning to turn and the 9 day in particular is providing strong support to the rally higher which is further emphasised by the crossing of the 14 day average above the 40 providing a bull cross signal.  For this rally to be maintained we need to see an initial break and hold above the 200 day moving average which currently sits in the 1.05 price area and once this has been achieved then 1.068 becomes the next logical target where the upper level of recent resistance now resides.  Should this level be achieved then we can expect to see a possible re-test of 1.1 in due course largely fuelled by a further surge in the US dollar which continues to reclaim lost ground on the dollar index.

Important items of fundamental news for the US and Canadian dollar include yesterday’s ADP figures which came in better than expected at 32k against a forecast of 29k which tends to suggest that tomorrow’s non farm payroll figures for the US are likely to come in better than expected (the current forecast 197k).  For Canada today we have Building Permits which are due to be positive at 0.6%, improving on last month’s figure of -0.5% whilst in the US we have the unemployment claims forecast at 441k, marginally lower than last week’s 448k.  Later in the day we have the IVEY PMI data, a sentiment indicator, forecast to come in flat at 57.7 – virtually unchanged from last month.  Finally on Friday we have the unemployment data for Canada which is expected to be positive at 20300 – adding a further 2400 jobs since last month, with the unemployment rate remaining flat at 8.2%.

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Factors Affecting USD/CAD 21 Jan 2010

Thursday, January 21st, 2010

CAD USD 21 Jan 2010

Even as the US dollar continues to strengthen against the euro it is not enjoying the same success against the Canadian dollar where it is currently struggling at the USD1.0510 price handle despite the price action having broken through the 9,14 & 40 day moving averages.  One possible reason is the recent diversification by various central banks, most notably Russia whose  first deputy chairman of its central bank, Alexei Ulyukayev, confirmed that it would be investing in Canadian dollar denominated deposits and bonds.  “The Canadian financial market is not very deep, so we can invest in deposits in significant volumes, while the bond market is limited,” he said.  Whilst the central bank did not specify how much of its reserves it was allocating to the Loonie,  analysts estimate that the central bank could put up to $9bn, or 2 per cent, of its foreign exchange reserves into the currency.  Russia’s foreign exchange reserves stood at $439bn at the end of Dec 2009 having grown 14% since March as rising commodity prices boosted Russia’s coffers.

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Support & Resistance for USDCAD (Daily Chart)

S1:  1.0346   R1:  1.0523

S2:  1.0240   R2:  1.0594

S3:  1.0169    R3:  1.0700

Other items of fundamental news likely to affect the Canadian Dollar

USD/CAD Analysis 8 Dec 2009

Tuesday, December 8th, 2009
Can Dollar to US Dollar 8 Dec 2009

The shooting star candle on the usd to cad chart may yet be validated later today as the currency market waits for the Bank of Canada interest rate decision later.  Consensus of opinion seems to be for a hold at 0.25% but given yesterday excellent building permits data which came in at a stellar 18.0% against a forecast of a mere 1.1% the Bank’s statement will be scrutinzed even more closely.  Just prior to release of the interest rate decision the market will have had the Housing Starts data which is expected to come in at 159k – marginally better than the previous 157k.  However, should this too overshoot together with a hawkish tone from the BOC could see the US dollar continue its downwards slide against the Loonie and with Bernanke signalling yesterday no change to an “extended period” of low interest rates this afternoon’s activity should provide us with some excellent trading opportunities in this pair.

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