Canadian Dollar Cross Pick 05.07.10
The USD/CAD halted the three-day advance and slipped to a low of 1.0339 following the bigger-than-expected rise in Canadian employment, but the lack of momentum to break below the 100-Day SMA (1.0331) may push the exchange rate higher as it appears to have carved out a near-term bottom during the previous month. However, as the daily RSI pulls back ahead of overbought territory, we may the corrective retracement carry into the following week, which could lead the pair to test former resistance around the 1.0200 level. As a result, if the USD/CAD finds short-term support around the April high (1.0214), I will look to go long at Tuesday’s high (1.0255), and will target the 200-Day SMA at 1.0508, with the stop at 1.0158, the 50-Day SMA.
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