USD to CAD - Daily Candle Chart 2nd November 2009

USD to CAD - Daily Candle Chart 30 Oct 2009

As the US dollar begins to fight back, so does the usd to cad pair, which closed on Friday with a wide spread up candle which reversed the losses of Thursday, probing deeper into the congestion area immediately ahead. Indeed, with the FOMC meeting this week and Non Farm Payroll on Friday, this could be a seminal week for the US dollar, and should the good news of a recovery into growth for the US economy be reflected in a suggestion of higher interest rates for the US dollar sooner rather than later, then this could propel the US dollar higher, and, as a consequence, drive the usd to cad through the current resistance. This price move could be fuelled further on Friday if the Non Farm Payroll data reinforces this view.

Technically of course we are now above all three moving averages and with the open of Friday finding good support from the 40 day moving average, this is adding to the bullish short term view at present, but only a break and hold above the 1.10 price handle will confirm this view, and should the FED signal a change in interest rates in the short to medium term, then we can assume that 1.02 was the floor of the recent bearish trend, and as a result we can now look towards a period of upwards momentum as the US dollar recovers some of the lost ground of the last few months.

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