Parity Party for the Loonie
Posted on April 6, 2010 by Yohay
Filed Under Forex News, Forex Opinions | 13 Comments
USD/CAD made it to parity. Riding on the dollar’s weakness and rising oil prices, the Canadian dollar matches the US dollar for the first time in 20 months. Where will it go next?
The Canadian dollar equals one American one, and even more. USD/CAD dropped under 1.00 for the first time since July 2008 – just before the financial crisis. The move began on thin Easter Day trading. Most of the world, including Canada is on holiday. The final move happened on high volume on Tuesday, during the overlapping period between the London and New York sessions.
The Canadian dollar broke under 1.02 on the previous job figures, breaking under the 2009 low. The pair had a hard time breaking under 1, as this was a very strong support line. This ultimate round number was eyed by many traders, analysts and politicians. Canadian officials expressed confidence that the economy will continue to advance despite the strong currency.
USD/CAD – Where next?
If the break under 1 holds, the next support lines are 0.98 followed by 0.97. Both lines served already worked as support lines when the pair traded under 1.0000 at the beginning of 2008.
The all-time low of 0.9056 reached in November 2007 probably won’t return so fast. It was a swing move back then.
If the pair fails to hold under 1, the next resistance line is at 1.0060. This minor area held the pair on the way to parity. 1.02 is already an important line, followed by 1.04.
The state of the Canadian economy is good – employment is improving, GDP is growing at a fast pace and the recent rise in the price of oil completes the puzzle – Canada’s oil exports are a significant part of the economy.
This USD/CAD parity doesn’t change my sentiment that the pair is headed even lower.
Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.
Enjoyed the post? You may want to subscribe by RSS feed or Email.Tags: canadian dollar,loonie,Oil Prices,Parity,resistance line,support line,USD/CAD,usd/cad parity,USD/CAD Technical Analysis
Comments
13 Responses to “Parity Party for the Loonie”
Leave a Reply
Popular Forex Posts
Daily FX Headlines- GBPUSD: Consolidation Persists at Fib Support September 2, 2010
- USD Graphic Rewind 09.02 September 2, 2010
- Crude Oil Weighed by Inventories, Gold Stalls as Equity Markets Rally September 2, 2010
- Growth Data Impresses but SNB Likely to Remain on Hold September 2, 2010
- TECH TALK 09.02 September 2, 2010
-
Stay up to date!
-
-
[...] USD/CAD parity – that was reached earlier this week, is fading away. The pair is getting close to 1.01 despite having all the reasons to fall. Also the Australian dollar, which got good (though expected) job figures is dropping on the dollar’s strength. [...]
[...] USD/CAD parity looks distant once again. The important employment figures have a chance of bringing the pair back there. Canadian Employment Change is expected to show a rise of 25,200 jobs, while the Unemployment Rate will probably remain unchanged at 8.2%. [...]
[...] this week, USD/CAD parity became a reality, after 20 months. This came after a leap in oil prices and also on the [...]
[...] the majors. It’s expected to show a bigger deficit this time – over 38 billion dollars. USD/CAD parity continues to [...]
[...] on April 10, 2010 by YohayFiled Under Canadian Dollar Forecast | Leave a Comment USD/CAD parity was closely watched in the past week. Trading around this area will probably continue. Here’s [...]
[...] USD/CAD parity will come to another test with two important Canadian figures: Housing Starts are expected to advance from 197K to 201K. This figure surprised in recent months. [...]
[...] this lower peak, the pair began descending – when it crossed the parity line once again, the drop was deeper – it went as low as 0.9953, lower than last week. Another [...]
[...] reacted quickly with a drop from 1.01 to parity, and continues south. USD/CAD parity was already reached recently, but the pair went back up on the greenback’s [...]
[...] was half of January’s growth rate of 0.6%. There are now growing signs that the battle for USD.CAD parity will [...]
[...] Posted on May 8, 2010 by YohayFiled Under Canadian Dollar Forecast | Leave a Comment Various economic events will impact the Canadian dollar in the upcoming week, after the strong rise that was seen in Canadian employment. Here’s an outlook for these events and an updated technical analysis for USD/CAD, now far from parity. [...]
[...] 1.01, the next line is the ultimate line of USD/CAD parity, last seen in April. Below this line, 0.98 and 0.97 are the next barriers. Reaching these lines [...]
[...] 1.01 comes the ultimate support line – parity. USD/CAD parity was last seen in April but didn’t hold for too long. Lower, 0.98 is a minor line of support, [...]
[...] Despite the blow from the employment figures, the situation in Canada is still great, and the Federal Reserve could weaken the greenback, sending USD/CAD for another attempt on parity. [...]