US Dollar vs Canadian Dollar (USD/CAD) - 21st May 2009

US Dollar vs Canadian Dollar (USD/CAD) - 21st May 2009

Yesterday’s wide spread down bar added further momentum to the bearish avalanche which continues almost unabated and burst through our initial target of 1.15 promptly followed by our second target of 1.14 so I hope you have been following this pair all the way down since I first turned bearish when the rate was at 1.26.  With little in the way of support between the current price of 1.1389 and 1.0840 if the current momentum is sustained we could see this price target hove into view sooner rather than later and at this stage the market could take a breather and consolidate following such a downward spiral.  Interestingly the dollar index too has reached a significant price milestone bursting through significant resistance in the 81 region, and suggesting further US dollar weakness in the short term and further strengthen the Canadian Dollar.

Important items of fundamental news on the economic calendar for both the US and Canada have included Foreign Securities Purchases which came in better than expected at 6.85bn against a forecast of 4.12bn.  This data is directly linked to demand for Canadian domestic securities and currency because foreign investors must purchase Canadian Dollar to buy these assets and confirm the market’s confidence in Canada.  Rising oil prices too can only boost Canada’s standing as a commodity producer in the energy complex.  Meanwhile in the US the unemployment claims for the week came in bang on target at 630k.

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.