US dollar sitting at support against Loonie

ForexNewsNow | Published on November 5, 2010 at 11:05 am

canada cad usd dollar forex analysisNEW YORK (Forex News Now) – With the announcement of the Canadian employment numbers today, the U.S. dollar / Canadian dollar pair is sitting right at the support and psychological level of “parity” in online FX trading.

The Canadian employment figures were released this morning, and came out mixed at best. While the full time employment number came out adding 3 thousand jobs, it was expected to be a positive 14 thousand number.

On the other hand, the Canadians have posted a decline in the unemployment rate, from 8% to 7.9%, and are moving in the right direction. Also posted in the report was a loss of 44 thousand part time jobs, but most analysts see the loss as simply a shift from people working part time to full time, a much more positive thing in the long term for Canada.

Looking towards the charts, there was only slight reaction to the numbers listed this morning, and the short term knee jerk reaction was reversed, and the longer term took over.

On the weekly chart below, you can see that the pair has been consolidating in a range from the 1.00 level to the 1.07 level. If the area around parity can hold, we could see this pair attempt a run towards 1.07 sooner or later. However, the Fed’s easing in America doesn’t bode well for the U.S. dollar, and could push commodities up over time, oil included.

As the Canadians export large quantities of oil to the U.S., this is normally reflected in the online FX rate of the pair. As traders mull over the information, the odds support a simple consolidation day, with next week setting the tone for the future of this pair.

It should be noted that the pair is sitting not only the parity level, but an area that was choppy support below. The pair might eventually break down, but it will have a fight on its hands, no matter what.

usd cad dollar loonie forex analysis



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