Forex analytics of LiteForex of 27.10.2010: CAD: Canadian dollar is going down; the target is 1.0375

On Wednesday in the currency market (forex) CAD continues to decline. On the one hand USD has good support now in the form of statistics on the USA; on the other hand - main currencies are in need of correction.

Forex (forex) Forecast: MACD indicator is in the positive area for the pair USD / CAD and it increases which confirms previous signal to buy the pair. The signal of stochastic oscillator today is the same being in the overbought area.

Forex (forex) recommendations: the targets of buyers today will be 1.0280 and 1.0340. More distant target is 1.0375.

The head of the Bank of Canada Mr. Carney has noted earlier that the regulator can begin to take measures in the currency market if the rate of CAD is risky for the national economy.

The Bank of Canada hasn’t conducted foreign exchange intervention since 1998 to CAD and since 2000 to EUR.

Carney has noted that the tension in the currency markets is obvious; the Central Bank and the authorities will take advantage of their capabilities if it is necessary. "We see now a steady force of CAD which could potentially have an impact on the growth of the economy", - stressed the monetary politician.

Last week a meeting of the Bank of Canada took place. At the meeting it was decided to keep interest rates unchanged at 1% per annum. The previous increase was in September (+25 basis points). According to the regulator who left the rates unchanged against market expectations - while the global economy tries to recover after the crisis it is necessary to examine carefully the aspects of reduction of the incentives in monetary policy.

The Bank of Canada has also reported this week that the forecast of economic growth paces was reviewed downwardly to 2.3% from the previous level of 2.9%. It looks like it is the result of the neighborhood with the USA where the economic situation remains difficult.

It became known last week that the Consumer Prices Index in Canada rose to 1.9% y / y in September while basic consumer price index rose by 0.2% in September from the previous level of 0.1%.

In addition the level of retail sales in Canada rose by 0.5% while retail sales excluding cars strengthened by 0,4% in August.

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