CAD: Canadian Dollar is being sold for the third consecutive day

At the Forex currency market the Canadian Dollar rate continues to follow the trend of the last five days: the CAD is being sold due to the lack of support: price for oil are decreasing and risks are increasing.

Forex forecast: MACD indicator is moving up in the positive area for the pair USD/CAD; however it is moving along the signal line and is not giving a clear signal. Stochastic Oscillator goes up in the neutral zone, and is giving a buy signal, while approaching overbought zone.

Forex recommendations: in case of breakdown at the level of 1.0010, the pair will go 1.0050 and 1.00700. If upward breakdown does not take place, the pair will stay at the current levels.

Last week was very eventful for the Canadian Dollar. It became known that unemployment rate in Canada increased to 7.3% in August against the forecast of 7.2% and previous level of 7.2%. In addition, labour productivity fell by 0.9% on quarterly basis in Q2 against the forecast of decline by 0.7% q/q.

It also became known that number of begun construction in Canada fell to 184.7 thousand in August against the forecast at 200 thousand.

Slowdown of the key indicators is obvious at the moment; which is caused by the state of the global economy and proximity to the Unites States.

According to statistics released earlier, net CPI in Canada increased by 0.2% m/m (+1.6% y/y) in July. The indicator fell by 0.7% m/m (+3.1% y/y) in June.

The Bank of Canada believes that GDP of the country will account to 2.8% in 2011 (reduction by 0.1% versus forecast of April); and it will be: 2.6% in 2012 and 2.1% in 2013. According to the Bank evaluation, export performance in Canada is negative, because low demand in the USA prevents the rise of the indicator and expensive CAD makes situation more complicated. The growth in the interest rate in Canada will directly depend on stability in the economic development. The head of the Bank of Canada Mr. Carney said earlier that there are several significant obstacles on the way of Canadian economic development. First of all it is the growth of the Canadian Dollar and secondly, it is European debt crisis, plus to this, drawn-out dialogue about the U.S. national debt also casts a dark shade on the Canadian economy. Central Bank will be able to waive further economic stimulation only when economic system will show steady self-sustained growth.

As it became known, number of begun construction in Canada increased to 205.1 thousand in July which is higher than the forecast at 194.5 thousand and above the previous level of 196.6 thousand. In addition, trade deficit in Canada was at the level of -$1.6 billion in June against the level of -$1 billion in May. This is probably related to the problems in the neighboring U.S.