The bearish momentum for the usd to cad continued yesterday, and as a consequence failed to confirm the hammer candle of the previous day, which had suggested that a possible short term reversal, or short squeeze, might take place in the next few days. The candle closed the session with a down bar, but with wicks to both top and bottom, perhaps indicating that momentum in the move is coming to an end, as the market takes a breather from the steep move downwards of the last few weeks. To add weight to this analysis we should pay particular attention to the lows of yesterday and Monday, both of which just touched the 1.08 price point, and it is interesting to note that we have seen an identical price action again today in this morning’s trading session. If this lower wick is maintained for the remainder of the day, then we could be seeing the start of a possible short term reversal as the usd vs cad attempts to find some support at this price level. With all three moving averages pointing lower, the bearish trend still remains firmly in place, and I would consider any short squeeze higher as an opportunity to open new short positions for a deeper move in due course, but only if the pair retrace above the 1.12 region or above.
All the fundamental news on the economic calendar is in the US, where the ADP employment figures have just been released, coming in marginally worse than expected at -532,000 against an expectation of -525,000, and as a result providing some temporary respite for the beleaguered US dollar with a consequent effect on the usd to cad pair which pushed higher on the news. This will be followed later this afternoon by a speech by Ben Bernanke and the ISM data for non-manufacturing all of which are covered on the eurodollar site. The key news for the Canadian dollar comes tomorrow with the BOC rate statement and rate decision, with interest rates widely expected to remain on hold.
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.
