Forex: U.S. dollar extends gains against Canadian Foil

on May 15, 2013

The USD/CAD pair has had a strong showing on Wednesday, breaking above the 1.01 handle and more importantly the top of the hammer that had formed on Monday. This market looks like it’s ready to continue going higher, mainly based upon the fact that we are closing at the very top of the candle for the session.

USD/CAD has continued trading in a bullish mood and pulled away from 1.0219, the pair’s highest point since April 25, to hit 1.0182 during early U.S. trade, still up 0.03%.
The pair was likely to find support at 1.0158, the low of April 26 and resistance at 1.0256, the high of April 25.
Official data showed that U.S. industrial production fell by more-than-expected in April, slipping 0.5% after a 0.3% rise the previous month. Analysts had expected industrial production to decline 0.2% last month.

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The data came after the U.S. Department of Labour said producer price inflation fell 0.7% in April, more than the expected 0.6% fall, after a 0.6% decline the previous month.
The reason to think this pair will go higher. As Canada exports so much oil to the United States, it makes sense that this market runs inversely to the oil markets in general.


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