Forex Analysis USD to CAD 19 August 2009

Forex Technical Analysis

The forex chart analysis for the usd to cad is particularly interesting today as it reinforces the bearish picture outlined in yesterday’s market commentary.  The candle for the day ended the forex trading session with a deep upper wick and narrow body reminiscent of a shooting star, and where the high of the day once again found strong resistance from the 40 day moving average which added pressure the downward move.  Given that this has occurred on the last three consecutive trading days it seems likely that we will see a continuation of the bearish sentiment in trading tomorrow as the recent upwards rally runs out of steam once again.  The only caveat to this forex technical analysis would be that the low of the session seems to find some support from the 9 day moving average so we need to bear this in mind in tomorrow’ s forex trading session for the pair.  My trading suggestion is therefore to look for small short positions on an intra day basis using the 30 minute chart with tight stops.

Fundamental Forex Analysis

The only fundamental news item on the economic calendar for Canada tomorrow are the Wholesale Sales Figures which represents the change in the total value of sales at the wholesale level and are forecast at 0% against -0.3% last time.  Meanwhile in the US we have the weekly unemployment claims which are forecast at 548k, marginally better than last week’s 558k, followed by the Philly Fed Manufacturing Index which is expected to come in at -1.9 against a previous of -7.5.  An improving picture for the economy and one where the index is beginning to approach the tipping point of zero which suggests improving market conditions.  Forex traders pay close attention to this particular index as it is generally considered one of the more important diffusion indices and is perceived as a leading indicator of the broader economy.  We also have the CB Leading Index, of lesser importance and expected to come in at 0.6% against a previous of 0.7%, a marginal improvement.

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.