USD to CAD - Daily Candle Chart 11th February 2009

USD to CAD - Daily Candle Chart 11th February 2009

From a technical perspective, yesterday’s fundamental news has had little effect other than to drive prices back up into the consolidation area of the last few months, and my advice remains the same – stay out of the usd to cad until further notice. Again I have drawn the principle lines for the pennant on the chart, and until we see a sustained break out, then we have to wait for a clear signal. If you are happy trading currency options, then a straddle trade is my suggestion, but do give yourself plenty of time for the trade to become profitable. Remember with options, time is a wasting asset and works against you as the option holder, and for the option writer.

This afternoon we have the Trade Balance figures for Canada, which are released at the same time as those for the US with the forecast suggesting a fall to 0.8B from 1.3B last time. If the actual exceeds the forecast then this is generally good for the home currency, in this case the Canadian dollar. There is a raft of news in the US, mainly from FOMC speeches and also the oil stats due mid afternoon ( UK time) ( more details can be found on the euro to dollar site) – these will always affect the Canadian Loonie more than the US dollar, so the impact of both the Trade Balance figures and the Oil  Inventories could have a significant impact later, both on the Canadian dollar and on daily oil prices.

The short term outlook is sideways, the medium term is sideways and the long term is bearish.