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U.S Dollar/Canadian Dollar Outlook

Jason Ayres
February 4, 2011
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The Canadian dollar continues to maintan its dominance over the U.S. dollar. We have consistantly seen the .99 level tested time and time again with out any follow through. I have included a link to a weekly chart to offer a bigger picture perspective on the USD/CAD trend. Using a common exponential moving average pairing of 8 and 21, we can see that the trend in force remains to the downside. This makes the support level I have highlighted at .98/.99 zone very important for the U.S collar bulls. A follow through to the down side could see the pair trading all the down to at the .90/.93 level. We haven’t seen those levels since oil was at $100.00/barrel. With oil continuing to test…and reject the $94.00 resistance, we have seen the USD/CAD conversely bounce off of the .98/.99 support. As Richard observed in his last blog…Oil is due for a correction, however a break beyond $94.00 and a push towards $100.00 is likely going to further weaken the U.S. Dollar towards the .90/.93 lows of 2007.

USD/CAD WEEKLY CHART

Jason Ayres
Jason Ayres http://www.croftgroup.com/

CEO and Director of Business Development

R.N. Croft Financial Group

Jason is CEO and Director of Business Development at R N Croft Financial Group, a member of the Croft Investment Review Committee and a Derivative Market Specialist by designation. In addition, he is an educational consultant for Learn-To-Trade.com and an instructor for the TMX Montreal Exchange.

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