USD to CAD - Daily Candlestick Chart 26th March 2009

USD to CAD - Daily Candlestick Chart 26th March 2009

With no direct fundamental news relating to the Canadian the market will look to the US instead and, in particular, the unemployment figures, final GDP figures, natural gas storage numbers and, of course, probably another foot in mouth appearance by the increasingly gormless Geithner.   The unemployment numbers are expected to remain flat at 650k and final GDP figures are expected to come in at -6.6%, slightly worse that previous, with the final GDP price index expected to remain flat at 0.5%.  The natural gas storage data is released by the EIA (as are the oil inventories) and has more effect on the Canadian Dollar than the US dollar owing to Canada’s sizable energy sector.  The data represents the change in the volume of natural gas held in underground storage in the past week and the forecast is expected to show less of a fall than previous.  The number forecast is -10bn cubic feet against a previous of -30 bn cubic feet.  It is often difficult to know what effect this data is likely to have on the Loonie since the number can have both inflationary and economic implications.

Moving to the daily chart yesterday’s candle ended as a doji but due to its position in the overall picture adds little to our analysis and is possibly more indicative of a period of sideways movement rather than of any significant short term reversal.  The bearish tone is still firmly in place and with the pair now deep in a congested area trading, with any degree of confidence, is probably going to be more difficult.  From the longer term charts it looks as though the usd to cad pair has still some way to fall and if you are trading for the long term then I would suggest you consider both the weekly and monthly charts before making any decisions.   With regard to any shorter term trading my recommendation for today is to step aside.

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