Forex: USD/CAD expands losses after FOMC

on Sep 19, 2013
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_iNVEZZ.com September Thursday 19th_: Yesterday the USD/CAD reached a high at 1.0317, but the descending 89-hour simple moving average didn’t let the price to hold there for long and the pair declined. At 18.59 BST the price traded at 1.0289, and when the Fed FOMC decisions came out at 19.00 BST the price depreciated sharply by 90 pips to the day’s low of 1.0200. The FOMC didn’t see enough evidence that the US economy was strong enough to initiate the tapering of the economic stimulus programme, which is currently set at $85 billion per month worth of assets purchases. The interest rate also remained unchanged from the 0.25 percent level. At the end of the day the USD/CAD had ceded 0.75 percent of its value, closing at 1.0221.

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Today the decline continues with the price falling to an intraday low of 1.0189. Right now the pair is residing at 1.0196. The bearish impetus is supported by the 89- and 200-period simple moving averages floating above the price action on the daily, 4H and 1H charts, on which also, the MACD (9,12,1) is negative.
Canadian Wholesale Sales m/m for July are due out at 13.30 BST today and are expected to rise by 1.1 percent, compared to the prior 2.8 percent decrease. At the same time the US Unemployment Claims for the past week are forecasted to be 331,000, which would be more than the previous reading of 292,000. At the same time, the US Q2 Current Account is to be announced and is expected to reveal a $96 billion deficit, compared to the Q1 $106 billion deficit.
The US Existing Home Sales report is set to show up at 15.00 BST (5.27 million expected in August) along with the Philly Fed Manufacturing Index (rise to 10.2 points in September forecasted).
Half an hour later the US CB Leading Index m/m for August is expected to match the July rise of 0.6 percent.
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