BLBG: Canadian Dollar Moving Averages Signal Gain: Technical Analysis
Canada’s currency may appreciate further after its 50-day moving average versus the U.S. dollar exceeded the 200-day moving average last week for the first time since May 2007.
The Canadian dollar’s 50-day moving average, currently at C$1.1926, surpassed the 200-day chart line at C$1.1957 on May 29. A similar crossover on May 11, 2007, preceded a 17 percent rally in Canada’s currency, known as the loonie, over the next six months.
“This is a technical negative for the U.S. dollar,” said Shaun Osborne, chief currency strategist in Toronto at TD Securities Inc., a unit of Canada’s second-largest bank. “This is just one other in a litany of weak technical signals that have been building up for the U.S. dollar in the past few weeks.”
The loonie climbed 9.3 percent in May, the most since at least October 1950, when Bank of Canada records begin. It appreciated 0.6 percent to C$1.0847 at 9:25 a.m. in Toronto. One Canadian dollar buys 92.19 U.S. cents.
