Dollar May Fall to Parity With Canadian Currency, Goldman Says

By Ron Harui

Sept. 24 (Bloomberg) -- The U.S. dollar may extend its decline to parity with the Canadian dollar, according to charts that predict price movements, said Kevin Edgeley, a technical analyst at Goldman Sachs Group Inc. in London.

Daily and weekly momentum indicators such as the stochastic oscillator and Goldman's ``Trend Strength'' charts are both ``bearish,'' Edgeley wrote in a research note yesterday. ``There is scope for further extension toward the potential trend line support from February around C$1.0000.''

The U.S. currency dropped to C$1.0346 as of 10:50 a.m. in Tokyo from C$1.0384 late in New York yesterday, when it touched C$1.0305, the lowest since Aug. 4. The greenback has weakened 1.1 percent versus Canada's dollar in the past month.

Support at C$1.0000 is on an ascending trend line that connects the lows of Feb. 28, May 21 and May 29, based on data compiled by Bloomberg. Support is a level where buy orders may be clustered. The C$1.0000 level was last traded on July 22.

In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. Resistance is where sell orders may be clustered, while support is where there may be buy orders.

To contact the reporter on this story: Ron Harui in Singapore at rharui@bloomberg.net