USD to CAD Daily Chart - USD/CAD Trend 12th January 2010

USD to CAD Daily Chart - USD/CAD Trend 12th January 2010

Yesterday’s up candle in the usd to cad currency pair brought some welcome relief to the recent and ongoing slide lower ending the trading session as a narrow spread up candle but which closed well below all three moving averages.  Since the end of December the move lower by the pair has resumed some of its original momentum and yesterday’s temporary pause should simply be seen in this context as a minor reversal in an otherwise longer term downwards trend.  In the medium term we can expect to see parity reached for the usd to cad pair but in the short term the key level remains at USD1.02 where an area of deep and wide potential support awaits for the US dollar.  Should this be breached then the drop to parity will almost certainly be achieved but this region could act as a springboard and we see it hold.  With all three moving averages now weighing heavily and with the 9 and 14 day pointing sharply lower the trend for the usd to cad remains firmly bearish for the time being and there are currently no signals either intra day, or longer term to suggest that this likely to change any time soon.

Items of fundamental news for both Canada and the US include the trade balance figures where the Canadian numbers are expected to be very positive and better than previous at 0.8bn (more exports than imports) while for the US the figures are forecast at -34.9bn, worse than previous which came in at -32.9bn.

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