Finotec News Archive - May 08 2008
CAD could be next to drop after US dollar continues recovery.
The Canadian dollar fell 0.4 percent against the U.S. dollar on Wednesday as investors worried that record high oil prices would begin to crimp global economic growth.
Anthony Boyajian 
08 May 2008
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The Canadian dollar fell 0.4 percent against the U.S. dollar on Wednesday as investors worried that record high oil prices would begin to crimp global economic growth.
Canadian bond prices were higher as lower equity prices increased the safe-haven appeal of government debt.
The Canadian dollar closed at C$1.0070 to the U.S. dollar, or 99.30 U.S. cents, down from C$1.0029 to the U.S. dollar, or 99.71 U.S. cents, at Tuesday's close.
"The Canadian bulls are having second thoughts just blindly following the oil price higher," said senior currency strategist.
The following technical analysis gives us a detailed lookout on what is expected to happen to USD/CAD.
The buying point is at 1.0089; based on a double bottom formation.
- Fibonacci retracement 61.8% gives us two possible take profit targets, at 1.0145 and 1.0197
- Fibonacci 23.6% is the stop loss at 1.0040
The selling point is at 1.0232; based on a failure to break the strong resistance.
- Fibonacci retracement 61.8% is the take profit at 1.0145
- Previous resistance is the stop Loss at 1.0321
To strengthen our analysis; we use many other indicators, starting with MACD (Moving Averages convergence divergence); we notice the crossing of MACD line to the signal line. In order to find the power of the market, we use RSI (Relative Strength Index).With RSI; we can determine that the market is in an uptrend.
The momentum oscillator is very important to understand the strength of the market and as we see on the graph; it breaks the zero line and moving upwards. The Stochastic oscillator bounced on 20% line and continues to go higher.
* The following analysis is for information only; Finotec is not responsible for any decisions or misinterpretations based on the given text.
By Finotec’s professional analyst,
Tony B.
dealingdesk@finotec.com
USD/CAD (Hourly Chart)
Finotec Analysis Team
08 May 2008
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