• Home ::
• Technical ::
• Analysis Reports ::
• Daily Forex Technical Report

• Send
• Print
• Add To
• Rss

d2487e45-1b21-4a98-9a2e-bf4b899d5664

0

0

Daily Forex Technical Report − CAD Reverses after BoC, USD Retreats on Profit Taking

Wed, Sep 3 2008, 14:15 GMT
by ActionForex.com Team

ActionForex.com

Action Insight Mid-Day Report

CAD Reverses after BoC, USD Retreats on Profit Taking

Canadian dollar rebound strongly in early US session after BoC left rates unchanged at 3.00% and issued a less dovish than expected statement. The statement note that interest rates remain appropriately accommodative. The bank believes inflation will "converge" around the 2% target by H2 2009 and headline inflation will be lower than expected due to retreating energy prices. Domestic demand in Canada slowed by remains strong and remains supported by financial conditions that remain "significantly better than those in most other major economies."

More importantly, some broad based retreat in the greenback is seen, in particular against commodity currencies including Aussie and Loonie. It's believed some profit taking is taking place ahead of key even risks of ECB rate decision and Non-Farm Payroll later in the week. Factory orders unexpected rose 1.3% in Jul versus consensus of 1.0%. Fed's Beige Book will be released later in the US session.

Eurozone retail sales released earlier today was a big disappointment, dropping -0.4% mom, -2.8% yoy in Jul. Eurozone Q2 GDP showed -0.2% qoq contraction, dragging yoy rate down to 1.5%. Services PMI recovered mildly to 48.5 in Aug. UK Services PMI unexpected improve to 49.2 in Aug but remains below 50. Nationwide consumer confidence which improved mildly to 52 in Aug but remains near to 4 years low. Australian Q2 GDP decelerated more than expected from downwardly revised 3.3% yoy to 2.7% yoy.

More Technical Analysis Reports Here

USD/CAD Mid-Day Outlook

Daily Pivots: (S1) 1.0637; (P) 1.0692; (R1) 1.0725; More.

USD/CAD reverses after reaching 1.0776, inch below mentioned 1.0791/98 and fall sharply in early US session. Break of 1.0612 indicates that an intraday top is in place. Outlook is turned neutral for the moment with risk on the downside for further retreat. Near term focus now turns to cluster support at 1.0410 (38.2% retracement of 0.9823 to 1.0776 at 1.0412). As long as this support holds, recent rally should still be in force and further rise is still in favor after completing consolidation. However, considering that 1.0791/98 is almost met, break of 1.0410 will indicate that whole rally from 0.9823 has completed with five waves up to 1.0776 with bearish divergence condition in 4 hours MACD and RSI.

In the bigger picture, medium term rise from 0.9056 is still in progress towards mentioned cluster resistance at 1.0791/98 (61.8% retracement of 1.1874 to 0.9056 at 1.0798, 61.8% projection of 0.9056 to 1.0378 from 0.9974 at 1.0791) first. Sustained break of 1.0791/98 will argue that rise from 0.9056 is probably more than just a correction in the long term down trend and will set the stage to test key long term resistance at 1.1874. However, break of 0.9974 support will indicate that whole medium term rise from 0.9056 has already finished. The three wave structure will indicate that it's just a correction in the long term down trend and much deeper decline could then be seen to retest 0.9056 low.

Stay tuned with our Forex Newsletters

ActionForex is set up with the aim to empower individual forex traders by providing insightful contents. Analysis reports, live pivot points on majors and crosses, etc are provided with collection of carefully selected educational articles and free trading ebook downloads.

Published on  Wed, Sep 3 2008, 14:18 GMT