USD/CAD Fundamental Analysis Jan. 17, 2012, Forecast
Economic Events:
08:30 USD NY Empire State Manufacturing Index 10.50 9.50
The Empire State Manufacturing Index rates the relative level of general business conditions New York state. A level above 0.0 indicates improving conditions, below indicates worsening conditions. The reading is compiled from a survey of about 200 manufacturers in New York state. The USD has been building up steam and if these results meet or exceed expectations, we might just see the USD rally against the Sterling and other currencies. Watch these results in the morning.A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.
08:30 CAD Foreign Securities Purchases 6.97B 2.03B
Foreign Securities Purchases measures the overall value of domestic stocks, bonds, and money-market assets purchased by foreign investors.
A higher than expected reading should be taken as positive/bullish for the CAD, while a lower than expected reading should be taken as negative/bearish for the CAD.
09:00 CAD Interest Rate Decision 1.00% 1.00%
Bank of Canada (BOC) governing council members come to a consensus on where to set the rate.Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.
A higher than expected rate is positive/bullish for the CAD, while a lower than expected rate is negative/bearish for the CAD. The BOC is expected to leave rates where they currently are and not to make any other statements Tuesday
Analysis and Recommendations:
Support and Resistance levels for tomorrow S: 1.0168 1.0173 1.0175
R: 1.0182 1.0187 1.0189
Remembering that the US markets were closed on Monday so volume was very light. The greenback fell to a low against its northern neighbor, as rising oil prices supported the loonie, which shrugged off Friday’s mass euro zone sovereign downgrade by ratings agency Standard & Poor’s.
USD/CAD hit 1.0183 the daily low during European trading; the USD/CAD continued to consolidated at 1.0199, dropping 0.31%.
The Canadian dollar was supported by higher crude oil prices, with crude oil for delivery in March jumping 0.97% to trade at USD99.83 a barrel on the New York Mercantile Exchange. Canada is the largest exporter of Crude Oil to the US.Raw materials, including oil account for about half of Canada’s export revenue. The BOC is not expected to make any changes in their meeting today.
All indications are that this is a strong sell opportunity.
Originally posted here
