Wednesday October 27, 2010 - 04:14:49 GMT
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Forex Hound - www.forexhound.com
Dollar/CAD Setup for Rally to 1.0262
Fundamentally, the recent decision from the Bank of Canada
to refrain from an interest rate hike and its forecast for a slow down in
economic growth may be underpinning the USD CAD.
Furthermore, the rally began shortly after the Dollar/CAD
briefly penetrated parity, which is typically a natural buying area. Additional
support may be being supplied by weaker gold and crude oil prices.
Technically this currency pair has formed a support base
after a few tests of a 50% level at 1.0176. This price is inside the main range
of .9979 to 1.0373. A failure to hold this price could mean a test of the Fib
retracement level at 1.0129 however an uptrending Gann angle at 1.0158 may prevent
this market from reaching this level.
On the upside, further confusion over how much quantitative
easing the Fed will implement and how it intends to distribute the money may be
supportive for the U.S. Dollar. This could trigger a rally into a downtrending
Gann angle at 1.0262, before a further rally into a 50% level at 1.0325.
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