Forex Blog - Currency Trading Online

USDCAD Makes interesting Move

Written by Administrator

Monday, 13 July 2009 15:39

What the HELL
How is anyone supposed to make sense of the market when you get headlines like this? Take a long position, but we think it's going to go down in the morning. More concise information is one thing you can get from doing your own assessment of trades and the markets. That’s what I try to get you to do with my posts. Even though I'll tell you when I am long or short a pair, I like to think that you take the information I am presenting and going to your charts to see if I am full of crap or maybe there's something to it. You'll find that sometimes I am on the money and sometimes I am not. At least you'll be doing your own assessment and getting better at reading the charts.

Does This USDCAD Chart Look Familiar?

If you've been following this blog, there were plenty of opportunities to trade this pair back to current levels. I still think 1.1460/65 is possible even though we have seen a good Bounce from 1.1499 on the hourly close. It's too late to get in now but watch for more setups to come, and I will always tell you when I am entering something.

EURGBP Showing Preference for GBP But Still Within Longer Term Ascending Range

USDCAD Set To Close Below S3 - A Sub 3% Happening
Less than 3% of the time does price actually close below the S3 line, and may usher in more weakness after a quick trip higher, around 1.1550 to 1.1600. I won't be surprised to see price actually cross back above1.1517 for a close over the pivot point but it isn't looking like it will as heavy as it has been in late NY trade. I am long the USDJPY for a quick trip to 93.42 and will hold that one through any pull backs seen in the coming days. I think it will pop higher Overnight though if Asia sees significant follow through with Equities off the back of the strong US close.

A Surges Ahead, Resistance Line Not Broken
Last Wednesday I put up a chart of the DJIA saying that it would fall along the shorter resistance line or break higher and hit a higher one, know as a bump and run reversal. Here is what the chart looked like. That top line is right around 8300 today. It makes sense that the price would now test this line, going for the higher one near 8400.

I would expect this line to hold for a few days. The interesting moves aren't happening here. It's the reaction of the currency pairs that has me guessing. The muted EURUSD and USDJPY have me really surprised to the almost 2% gain in the Dow. USDCAD has me scratching my head too, with oil still under 60 the Cad has posted a nearly 130 point gain against the dollar since the NY CUT.

Oil Slides, CAD Gains...hmmmm
This is interesting to say the least. First support points come in as price nears the ascending support line and may hold around the daily top 1.1448 from 06/17/09. The move this morning is courtesy of an upgrade in Goldman Sachs, remember of course that these financials will be bolstered by the TARP money and not by positive cash flow or what I would call real growth. Their bottom lines will look better because they have cash in the vault, not because they are making it. Borrowed money to make the bottom line look better was part of the problem. Investors will begin inflating the financial stocks, only to be let down by later when it is abundantly clear that they really aren't doing that well. It may be the next bubble.