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The CAD slid towards a three month low versus the USD

Varengold Bank Research Team from Varengold Wertpapierhandelsbank AG at 02/09/10


Good morning from icy Hamburg and welcome to our Daily FX Report. The EUR could recover against the USD and the JPY. Additionally we will report about the CAD and some economic data from Canada. However, we wish you much success today.

Market review

The CAD slid towards a three month low versus the USD as a drop in stocks reduced the demand for currencies which are tied to economic growth. The CAD dropped 0.3 % against the USD and reached 1.0741. In 2010, the CAD has already weakened 1.9% against the USD on concerns that the struggle of European nations to contain their budget deficits and Chinas move to discourage lending will slow the global recovery. The EUR could recover from its downward trend against the JPY as European Central Bank President Jean-Claude Trichet left a central bankers meeting in Sydney on day earlier than expected. This creates speculation that policy makers could help Greece to reduce its budget deficit. The EUR rose to 122.27 versus the JPY. Furthermore the EUR climbed against the USD and reached 1.3678.

Canada`s statistic bureau in Ottawa said that housing starts rose to 186,300 units in January 2010 from a revised 176,100 in the prior month. The government dept increased 0.1 % and price of 10 year bond advanced 8 cent to 103.18.


Since the last week of January, the EUR has been trading in a sideways trend against the CHF. Recently, the currency pair touched its important Fibonacci Retracement line at 1.4654 (38.2%) and the prices recovered. Also a crossing MA Oscillator through the signal line from below may indicate a continuing bullish trend. But it remains to be seen if the EUR could cross its Fibonacci level at 1.4684 (50.0%).


As you can see, the GBP is trading in a bullish trend channel versus the AUD since the beginning of January 2010. Recently, the prices crossed the lower line from the trend channel but could recover at its support level around 1.7909. Furthermore a crossing MACD through the signal line may indicate a successful pull back for the GBP and a continuing upward trend channel.

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