Contrarian outlook - Pullback on cards ? Could tomorrows Fed Black Swan of No Rate cut be the catalyst ?
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Here is a chart of the bearish channel in the USDCAD that dates to Oct. 23
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Expanding on my friend David's chart analysis..
USDCAD at bottom of channel
Weekly RSI at 15
The red and blue dots that you see on this chart represent 8 consecutive down months (red) or up months (blue). This is RARE....if I were to go back and show the chart from the early 70's, you would see that nearly every time this happens, the USDCAD forms an important bottom. I am buying here...stops under 89 (a bit long term for some here perhaps)
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Explanation of TL
Hi Euchre,
As I have sometime now I will post the chart to show the TL I was talking about in the prior post.
This shows that we are indeed at oversold and extreme levels- but there is further room to fall according to the Murray Math. So this is most likely a temporary respite. Support looks well defined here at the 1/8 level. Because the Loonie has broken a few records it is more difficult to define the precise area for reversal. But the Main trend line as I have shown remains in force- hence I wanted to show it to you.
Next MM targets are 0.9277/0.9216/0.9155 the last of these levels is the maximum extreme level approximately 180 pips from our current location.
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triangular arb, my mistake
thanks for the correction, I made a mistake in carrying the usd/cad to the other side of the equation. I get an F on that excercise.
How about this one:
attached are graphs of gold and oil from Nov 2002 to present. Calculating the slope of each from peak to peak will give an idea of which is more in demand:
oil high = 97 (aprox)
oil low = 28 (aprox from nov 2002 on this chart)
gold high = 825 (aprox)
gold low = 325 (aprox)
Oil has increased by about 250%
Gold has increased by about 150%
plotting oil vs. gold you get a slope of (97-28)/(825-325) = .14 aprox
(greater than 0, oil in greater relative demand)
looking closer, say just during 2007 you get:
(97-50)/(825-600) = .208
Essentially, this tells me that since 2002, oil has become more attractive an investment than gold since the slope of a graph of oil v. gold has become steeper in recent years. Another way of looking at it is previously, gold was 325:28 or 11.6:1, now it's 8.5:1. My bet is this relationship goes to 5:1 before it goes to 10:1. Interesting how AUD/CAD is currently trading near 0.85:1...
What does the board think are the best plays regarding going long oil/gold (or shorting gold/oil)? GBP/CAD?
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EURCAD has put in for an interesting move. We have the oil and gold push for the loonie, yet shouldn't we also seeing the anti-dollar flows for the euro?
The pair has effectively relieved 1.35 of its technical significance. This retracement from this morning's spike low may offer a good, long-term shorting oppurtunity; but I'll wait for the weekly close before I take on the risk of a loonie long at these levels (even if it does have the potential to benefit from a euro pull back).Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=9164&stc=1&d=1194452469
Now, to inundate you with charts. I was just looking through the commodity charts and they are looking rather extended on their own. Crude has chopped ahead. Alternatively, gold has accelerated into its gains. If you are forecasting an exhaustion in the near term, it will probably come side by side with gold and crude. At these extremes, market participants will be extremely nervous and will likely jump at any sign that their now profitable longs gold/long crude/long cad positions could go against them.
Also, for fun, I attached a gold chart denominated in Canadian dollars. It is no where near its multi-decade highs like the $ backed version. I looked at the same for crude, the same was not true. It is still pushing record highs.
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I hear ya..it stopped dead on the line.
We're going to have to be careful here. On the next down swing if usd/can fails to set a new low we could be in trouble...I'll be taking profits down near the recent low. New shorts on a break of .9060ish.
I think this is a potential.....
Should we head straight down from here...holy ---- watch out the selling will be INTENSE. Like .87-.88 area........
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Since we don't have an easily accessible thread to AUDUSD (and I'm lazy), I just wanted to mention the comm bloc pair here.
That was an incredible break. David and I used it as our potential range trade on Friday (but I made sure to suggest that technicals like this were very prone to breakouts - a perfect range setup is often a perfect breakout scenario as well); and it clearly worked out the other way. I wanted to suggest an alternative breakout trade; alas there wasn't enough room
I didn't set a short like I wanted to, because it went against a trade recommendation; but at 300 points, it would have been a profitable trade no matter if I was ultra-conservative or risky with it. Now, it's just time to wait for an oppurtunity to get back on. I won't take a long position unless we get a close back above 0.91 (and even then I would hesitate); but I can see a short position on a retest of 0.91 or a break through 0.8750.
Anyone catch this move or have any plans to get on board?
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Well, considering today's price action, unless you jumped aboard CADJPY on Friday or early trading today; I would only try for a small position and perhaps build up on breaks through 113 and 110. That will limit my risk and still allow me to participate in momentum.
USDCAD could be heading into some resistance. If you are a long-term bear, you can look for 0.96 to hold the big rebound back; but I wouldn't bet on it. I had a long position through 0.9515 and took it off at 0.9590. Considering the predominate risk and momentum lie in an upside break, I'm simply placing a buy stop order at 0.9625.
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Wave 5 Underway. Check out USD/CAD on 180 min chart shows very precise Waves. We are in the Wave 5 now. Expecting atleast 100 % of Wave 1 at around 9850.
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Sitting SHORT on USDCAD, entered at .9822 with immediate target at 50% Fib Level at .9472. MACD points to short this pair as well. This pair has started its retracement as of today. See the chart belowAttached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=9428&stc=1&d=1195235859
I'm disappointed we didn't get to hear more about what Dodge said at the G20 meeting this weekend. A few places are reporting that he suggested that the Canadian currency is shouldering a disproportionate weight in the US dollar's drop (a shot at pegged and managed float currencies like the yuan), like he suggested he would. But I'm sure there was far more commentary on the Canadian dollar's heights.
More importantly, the governor came out and actually suggested a rate cut is possible due to the "risks" to growth. See, he has been relatively mum on the currency; so whenever he speaks, he actually has some influence over the loonie with mere commentary.
Good bounce off a 50% fib lining up with the 0.97 level. Let's see if we can get to parity before Wednesday's retail data. If inflation holds at its current levels tomorrow, it could support Dodge's outlook and then we have the Beige Book tomorrow.
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RBP, I agree with you. Gold has almost no real impact on the more important sectors of the economy (consumer spending, housing, capital investment) and oil sold in Canada have the benefit of a much lower basis risk than crude shipped into Texas (certainly a relative argument rather than a nominative one). And, though Canada is an independent economy, it is just as linked to global fluctuations (credit issues, foreign exchange imbalances, market volatility) as the seven larger economies above it. What's more, with trade to the US accounting for 80% of Canadian exports and inlaid regulations and cross boarder cooperation providing the US and Canada an even tighter link, I don't think the latter economy could fight the current for much longer.
On shorter time frame, the technicals are looking good. Despite the dollar's broad sell off, USDCAD is still doing its own thing and holding near its six-week high. The ascending wedge suggests a breakout is in the works with a 75-point range right now. I'm putting on a stop long order at 0.9895 with a limit 80 points higher and a stop 45 points back (with I may change depending on momentum). I'm also contemplating building a long position with a break through 0.9860. And, to cover my bases, I'm going to open a stop short order below 0.9750, but I'm not sure what kind of buffer I should give it. Any ideas?
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This looks like a good head-and-shoulders break in AUDUSD. I was trying to play this pairs downside potential in the recent range trader on DailyFX+; but it looks like the limit short order was set too high. In my efforts to minimize a potential upside breakout on Thanksgiving volatility, I instead detract from a good, medium-term trade. I was going to take a trade closer to market yesterday, but I didn't want to alter my recommendation. Oh well. Perhaps we can get a retest of former support before continuation to 0.8350 and potentially 0.79.
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Anyone looking at NZDUSD. Looks like we have breakout potential to the downside, but the confluence of technicals looks like it may keep price action up. I'm tempted to take along on support and look for 75% of the range with the 11/14 and 11/20 highs. That would be a good 120 points. Risk would be relatively straight forward too. A break below the rising trendline could be taken as a sign of a breakout; however I don't want to go at this with orders as I won't be around a computer for Thanksgiving; and a jump in volatility could whip me out. Looks like I may miss out on this trade
On the other hand, since I'm looking for possible continuation in a downside move in AUDUSD, I could hedge with a long NZDUSD position and widen the stops on both of these pairs. Hmm.....
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Welcome to the forum lanidar2000.
This position was suggested in the Top Bottom article written by Jamie Saettele, although I agree on some level with the position. The medium term has turned in favor of the greenback, but we could easily find ourselves in a pull back that could stall things before going higher.
I don't like the recent consolidation from the pair though. Of course, this is the natural course of a recovery in USDCAD; but after such a steady decline, I would like to see consistency in the upside move that we found in the drop. Right now, I'm looking for a small, long position on a limit entry order at 0.9805 with a stop 35 points below and a first target of 0.9870 (which will invariably turn into a trailing stop if I'm watching it and it looks like momentum will carry it through resistance. I'm also waiting with a buy stop order at 0.9930. The stop on this position is set 50 points below entry and I have yet to determine the target. I won't let this trade execute unless I'm watching it, because it will likely have trouble around parity; and the way things have been going recently, I could get triggered on chop higher rather than a good momentum move.
Are you positioning yourself in any other pairs, or are you just building a position in USDCAD on the expectation of an extended rebound.
P.S. What kind of options did you trade on the CBOE? I'm very interested in options in general, it's where I got my start in trading.Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=9598&stc=1&d=1196091922
It's getting exciting. USDCAD popped out about its modest rising trend channel and came within 15 points of reaching parity. At this point it seems only a matter of time and social grace before we have our test of 1.0000. And, if traders jump on this level, I will be looking for momentum to 1.0330 and 1.0480.
My short-term long USDCAD position from 0.9930 is in the money and I moved my stop up to break even. This may be stopped out at b/e if we continue to see hesitation below parity as I feel like a correction could start to bubble up. Thoughts?
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I was tagged out for a 20 point profit, but that is alright. Profit is profit and I'm still concerned with the medium and long-term direction for USDCAD. However, if we can get a move above parity, my confidence in a longer-term trade will be much greater. Right now, I'm not going to put in for an order entry (opting instead for a market order) to avoid a scenario where the market drives us through parity in an exhaustion rally just to clear out the milestone.
It looks like we may also have a case for some short side momentum; however, the floor of a rising trend may keep us in the medium/short-term rising trend. Considering a long limit entry order at around 0.9845/55, but will have to wait until we get closer before I put that position in.Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=9635&stc=1&d=1196264281
Darn it all! I had two chances to jump in on a long position at the bottom of the trend channel last night, but I didn't take them (the first I was skeptical and the second one I was asleep for). After deliberating last night before leaving the office, I decided that I didn't want to take the risk of a commodity-driven move (clearly not a factor given the surge in oil), more dollar volatility or pre-news release jitters. In retrospect - dumb move. The probabilities were there, so I should at least put in a small position with a relatively tight stop.
Now I will wait until we can get through parity. I might take a small position 10 points above 1.00 and then add to it if we can break through the top of this rising trend channel. Under the same formation, my initial position will have a tight, trailing stop in case the channel controls price.
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daily usdcad elliot wave count
hello, i made an elliot wave count on daily usdcad, can you tell me what do you think about this count and if you agree or disagree with this. thank you guys. i want to explain that count by the fact that we have an extended wave 5 which has an extended wave 5, this indicate that we must have a retracement to the low at 0.9055.
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heads up, the USDCAD is approaching a potentially strong resistance level from a trendline and Fib level (1.0170s)
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Good surprise, good reaction. I was thoroughly impressed by that fundamental play. Of course, I had a position in wait for the opposite surprise (bullish sentiment and a break to the downside). I was not expecting the cut, and hence I was not looking for the channel to break to the upside. After I saw the announcement cross the bloomberg, I was tempted to put in a trade; but the market gapped to nearly 40 points after the announcement and I had no chance at getting filled.
Price action has slowly pulled back after the initial upshot; but I remain bullish on this pair. With the BoC forecasting weak inflation and working their way around slowing growth concerns, I think they're going to alter their language to match that from the Fed (even if they don't go for consistent cuts like the FOMC). Looking for a limit entry long on a pull back, but I can't find a good point to jump in until 0.99. So, I may just wait for a high-time frame candle close above 1.0125 and then hold on for a couple hundred points.
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That was a pretty sharp pullback from the test above 1.02 (made further interesting as it happened when the dollar was rallying in other major pairs). So far, we have had a pretty consistent rally from USDCAD without any major pull backs. Even this pull back is small when you look at the higher 480-minute, daily time frames. This leads me to believe we are going to see a deeper retracement.
Considering a short stop order at 1.0115 which will look for 50 points and keep a risk of 30 points. However, with my medium-time frame well into its uptrend and higher time frame just turning north, I'm thinking there is more upside risk and a downside break could quickly dry up. I'll have to watch this one for entry - no orders; and take monitor the trade as momentum develops.
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What evidence do you have that lower rates is good for stocks? Recent history actually tells us that rates and stocks move together (although the talking heads on CNBC seem to think the opposite). Lower short term rates indicates that demand for short term credit is falling. That is what holds up stocks in the first place. As demand for credit goes, so too does the stock market. This is a weekly chart of the Dow with the 3 month t-bill rate.Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=9739&stc=1&d=1196793933
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Check out the Candlesticks forum for the words to accompany this chart.
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