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Mid−Day Forex Technical Report − USD/CAD Surges, Yen and Dollar Consolidates

Thu, Oct 9 2008, 14:35 GMT
by ActionForex.com Team

ActionForex.com

Action Insight Mid-Day Report

USD/CAD Surges, Yen and Dollar Consolidates

Markets remains relatively calm comparing to recent high volatility. US stocks open mildly higher but there is not enough momentum for a sizeable rebound. Yen and dollar continues to consolidation in most pairs. Aussie is still maintaining earlier strengths. While the Aussie is the biggest winner today, Canadian dollar is among the biggest losers. USD/CAD resumes rally after brief consolidation earlier today and take out a medium term projection level. With Crude Oil nearly flat, weakness in the Loonie is likely on fear of a disappointing job report from Canada tomorrow.

Economic data continue to take a back sea today. US jobless claims dropped mildly but remains elevated at 478k. Whole sale inventory rose from than expected by 0.8% in Aug. UK Trade deficit widened to -8.2b in Aug. Halifax House price dropped -12.4% yoy in Sep. Japanese machine orders dropped more than expected by -14.5% mom, -13.0% yoy in Aug. Australian unemployment rated climbed to 4.3% in Sep as expected. Germany Trade Surplus narrowed to 10.6b. WPI dropped -0.6% mom in Sep with yoy rate moderated to 5.8%.

South Korean, taiwan and Hong Kong reduced interest rates following the coordinated global rate cut yesterday which include Fed, ECB, BoE, BoC, Riksbank, SNB and PBoC. BoJ and RBA injected 4T yen and A$3.49b into the financial system. US Treasury Paulson said that the government will use all tools to maximum effectiveness, including "capitalization of financial instuations" to resolve the deepending credit market crisis.

More Forex Technical Analysis Reports Here.

USD/CAD Mid-Day Outlook

Daily Pivots: (S1) 1.1088; (P) 1.1183; (R1) 1.1373; More.

USD/CAD's rise from 1.0297 is still in force and extends further to as high as 1.1347 in early US session, taking out mentioned 100% projection o 0.9823 to 1.0819 from 1.0297 at 1.1293. At this point, intraday bias remains on the upside as long as 1.1186 minor support holds. Further rally should be seen to next target of 1.18 resistance zone. On the downside, below 1.1186 will indicate that an intraday top is in place and bring consolidation first.

In the bigger picture, sustained trading above 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) confirm that medium term rise from 0.9056 has resumed. Also, this adds more credence to the case that whole long term down trend from 1.6196 (02 high) has bottomed out at 0.9056 too. The medium term up trend from there will likely extend further to test next key long term resistance at 1.1874 (38.2% retracement of 1.6196 to 0.9056 at 1.1783). On the downside, while some pull back might be seen, break of 1.0297 is now needed to indicate a top is formed. Otherwise, further rise is still in favor.

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Published on  Thu, Oct 9 2008, 14:41 GMT