Chart of the Week
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Strong CAD dollar
Fri, Nov 2 2007, 14:48 GMT
by Tatsuya Kawanishi
FXstreet.com
USD/CAD established a record low at 0.9323 at 13:45 GMT on Friday at Nov 2nd. What strengthens the CAD? Just a relative strengthdriven by the US prolonged recesion? Although the answer is not simple, several points can be considered. First thing that we should consider is the unprecedented high oil price. Canada is the world´s fourteenth largest producer of oil. A strong oil demand appreciates, or is bullish fot the CAD. Second , Canada is one of the world´s leading industrialized nations that did not send troops to Iraq. So Canada does not have any geopolitical risk so far. Substantive economic data clearly shows the growth of the Canadian Economy. The net change in employment rose by 63.0 K from previous 51.1 K.
The pair has kept drawing a clear downtrend line within a 130 pips range. On Friday, as the net change in employment and the unemployment rate released, USD/CAD showed a 130 pips fall.
The downtrend line is not likely to end any time soon. However, the pair is now back inside the projected line of the downtrend channel (third line), so it might get some support from here.
3 Moving Averages of 13, 21 and 51 EMA are drawn in red, blue and black respectively.

Published on
Fri, Nov 2 2007, 14:52 GMT
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