USD/CAD: Headed to 1.30?
March 2, 2009
In the middle of February, when USD/CAD was trading at 1.2515, I talked about how it could hit 1.28. Now that this target has been reached, the move could extend to 1.30.
At the time, I argued that the shrinking trade deficit in the US and the first trade deficit for Canada in 32 years would lead to more strength for USD/CAD. This morning, Canadian GDP numbers were much weaker than expected. In the fourth quarter, the economy contracted at the fastest pace since 1991, 17 years ago.
USD/CAD is also trading higher because of broad dollar strength. The dollar has skyrocketed as the Dow breaks 7k to hit the lowest level in 11 years.
USD/CAD is trading well into the Bollinger Buy Zone which i mentioned on Feb 11. There is scope for a bit of a retracement, but as long as the currency pair holds above 1.2600, we could see a move to 1.30. If USD/CAD does manage to trade at 1.30, we could see a gap higher.
Poor Canada has a lot more trouble ahead due to its sensitivity to the US economy. The only silver lining is the rally in oil prices.
source: eSignal
Posted in 2009 canadian dollar, Canadian Dollar, Forex Technicals, USD/CAD, forex blog, us trade deficit
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March 2nd, 2009 at 1:12 pm
The rally in oil prices looks temporary, so I also think that breaking 1.30 is bound to happen.
Also the pound made a move, and fell under 1.40. Quite a fascinating week ahead, and it’s only the beginning…
March 2nd, 2009 at 4:27 pm
I wouldn’t be at all surprised to see 1.30 hit before the week is out. Both the parabolic SARS that I use on the weekly chart have just turned positive and the MACD is just crossing upwards as well. Plus it’s equally as bullish on the daily chart as well.
March 4th, 2009 at 9:55 am
The Canadian dollar dipped to its three month low as the market absorbed some of the implications of the Canadian central bank’s 50 basis point rate cut and accompanying statement. (Resource News International via COMTEX)
March 5th, 2009 at 5:48 am
We might see it at a lower side
March 23rd, 2010 at 1:59 am
[...] 8.USD/CAD: Headed to 1.30? | Kathy Lien For my technical forecast for the GBP/USD, read my full 2009 currency market forecasts on GFTForex.com … GBP-CAD – A fleeting interested as one of our service contracts is paid in CAD, although we already have 80% of the required CAD currently for this years contact. Loony is driven by commod. prices and will oil etc. [...]