USD to CAD - Daily Candle Chart 3rd March 2009

USD to CAD - Daily Candle Chart 3rd March 2009

This is a tough call! If you were brave you went long as suggested yesterday, and the day finished with a wide spread up bar, following the breakout to the upside after months of consolidation. The worry of course is the resistance directly above, at precisely 1.3000, and I have shown this on a smaller scale chart to highlight the point. In the last five months we have had three failed attempts to penetrate this price point, and we could be about to have another, so we will have to be very careful. As I said yesterday, if you are more cautious in your trading, then I would suggest waiting to see whether this level is breached, and only then opening a long trade once it is clear of this level. The alternative is to open a position now, based on the breakout from the congestion below, which is now providing strong support to a move higher coupled with all three moving averages. If you do decide on the latter, then I would suggest relatively tight stops probably in the 1.2680 region or possibly just below as we have a BOC rate statement due out shortly which will move prices sharply on release. In addition on the economic news front we have Ben Bernanke speaking to the Senate Committee this afternoon, which again will cause extreme volatility in the usd cad currency pair. Both items are covered in the latest currency news video, on the economic calendar and in the live news feeds now available on the site, with the latest prices available on the live currency charts.

The short term outlook is bullish, the medium to long term is sideways.