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Forexpros.com Daily Analysis - 09/05/2011

May 09, 2011 7:22 AM ET
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Founded in 2007, Forexpros is a definitive source for tools and information relating to the financial markets such as real-time quotes and streaming charts, up-to-date financial news, technical analysis, brokers directory & listings, an economic calendar, and tools & calculators. The site provides in-depth information on Currencies, Indices & Stocks, Futures and Options, Commodities, and Rates & Bonds. With a growing readership worldwide, Forexpros is a leading global financial portal that is constantly committed to launching innovative features and sections to ensure an optimal one-stop source for its readers.
USD/CAD hits likely turning point after strong week

Last week was not something we have seen early March - and that is 4 sessions higher for the USD vs. CAD in a row. It was a welcomed move for Canadian exporters, and is likely to be met with equally exuberant selling. While the week took us from nearly 0.9450 to above 0.9700 (closing at 0.9664), no technical damage has been done to the downtrend, and at the moment it remains firmly entrenched. Thursday and Friday put the market in an improbable position for continued strength. This is not to say further strength cannot occur, but it is unlikely without first a pullback into the 0.96 - 0.9550 region.
With the trend down, the pair has not lasted long above the Bollinger Bands to the upside prior. The pair has moved aggresively away from its mean price is likely due for a pullback towards 0.9600-0.9550 (the mean price projected forward).USD/CAD Daily Chart,On a positive note for USD, the volatility has increased. Trends are complacent, and countertrend moves and a potential reversal will require volatility to increase and stay up. It is highly unlikely that after the sedate trickle this market has had lower it will just reverse course casually and drift higher. Positions will be shaken out, and the pot will need to be stirred for this trend to reverse. The longer-term or daily downtrend remains in place until the rate climbs above 0.9800. A rally above 0.9740 would indicate USD bullishness and a likely test of the trendline at 0.9800. 0.9800 is a probable high for the week based on average weekly movement, but volatility did increase last week, therefore watch for extensions into 0.9850. The recent lows at 0.9450 are to be well supported this week with support likely at 0.9550, followed by 0.9500 and 0.9450. Support above 0.9450 is a bullish sign and with an upward push after would create a short-term uptrend.


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