CAD: Canadian Dollar gains momentum

Consolidation of the Canadian Dollar at the Forex currency market has turned into an active phase on Monday.

Forex forecast: MACD indicator is in the negative area for the pair USD/CAD and is going down, giving a pair sell signal. Stochastic Oscillator has reached oversold zone and is giving a pair sell signal.

Forex recommendations: if current market sentiments are be maintained, traders’ target will become the level of 0.9730.

Technically, the pair USD/CAD has been in the grip of the downward trend since the end of September, and movement of quotes is within the pattern “top-down flag”. The lower boundary of the graphic figure passes through important support level at 0.9730, the lows of December 2007.

According to the experts from the International Monetary Fund, Canadian economy will grow by 2.3% y/y in the current year; lower than the forecast of October (+2.7% y/y). At the same time IMF expects that in 2012 Canadian economy will increase by 2.7%. The exact figures of the GDP growth in the country will be published on 28 February but meanwhile IMF supposes that the indicator will be at the level of 2.9% (earlier – 3%).

Current consolidation of the national currency of Canada is supported not only by technical factors, but by fundamental ones as well, however rally will slow down when approaching important borderline of 0.9730, this level will not be exceeded at the first attempt.

Note, that technically, correction of the downward trend is taking shape, caused the fact that the pair has been oversold.

 

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