USDCAD trend reversal?

There are two great articles written within the last couple of days that address this from an Elliot Wave point of view. Both analysts have a very good track record with their calls.

One is from DailyFX, article is written by Jamie Saitttle and he is predicting an imminent turnaround soon, very soon. Anybody can access this website.

The other is written by Brian Dolan from GAIN, it's filed under weekly strategies for those that trade off of the GAIN platform.

According to Elliot Wave, we are at or near the bottom of wave 5 of a big 3rd wave. Donlan last night thought we could possibly see a last push to about 1.0732 to pull in the last of the laggard sellers but took a half position at current (1.0830) level in case we did not get that last push down.

Of course, there is my own analysis. Simply subscribe to Google's update service and use "Canadian Dollar". With nearly every paper and financial rag in the world talking about it, you know it goes the other way. You will get peppered with emails about how strong the Canadian buck is. That's my cue! Secondly, the COT reports are showing the commercial traders (smart money) are in the extreme long position with the US buck. They really are the makers of the markets. Last but not least, all we have been hearing for the last 2-4 weeks is the "sky is falling" story in regards to the US buck, yet another important clue. Once the media catches on, it's usually over.

Elliot Wave theory suggests the correction phase should take us to somewhere in the 1.1160 area before the Canadian dollar resumes it's current path and this could be an all summer ordeal.

Good luck, WillyT

It amazes me even more that some people think they know more about CAD than the market itself.

There is no right or wrong price for USDCAD, the price is what it is and what it prints in the chart. Period. It doesnt matter why it goes down or up, and it certainly doesnt matter what any of us might think whether the USDCAD is overbought or oversold. The only think that matters is what the chart says, and the chart says bearish.

this is the level i'm looking at too.

i think what most people are saying is, it's good to hold on to your shorts if you did above current levels. but to jump in now would be a gamble.

Lucky you! You can see the future!

No i cannot predict the future but i can figure out when a currency becomes overstretched & is being strengthened or weakened by speculators. Once you can figure it out, you will be successful 97 percent of the time, not just winning peanuts, but in a big way & with near surity.

When the currency becomes overstretched because of speculators, then the trade becomes fundamentally incorrect. This will then have to give in. People who trade fundamentals are able to pick it up well in advance. These changes will show up in the charts much later, that is what they call Technicals. That is the reason why big money is always ahead of the crowd & 90 percent of traders fail.

I predicted the change in the sentiment for AUD & NZD, well in advance, before our so called gurus/technical wizards started shouting short, short, short. Please read my thread on NZD, a disaster waitnig to happen, if you dont believe it.

Its not that people who follow fundamentals never lose, they do but their gains are tremendous, & without any pain of monitoring their positions sitting at the computer.

Good-luck

im long too kzazs , i believe now is the time to go long

This "bubble" issue is one nasty matter to go into, imo.

And I think that trying to predict its crash is hard and spreading the panic is one irresponsible thing to do, specially when this hits overall inexperienced traders, short in cash.

I'm hearing "bubble to go off" for quite sometime here. I belive that at some point this is likely to happen, although I couldn't predict its extension.

What I want to say is that maybe - maybe - there are another hundreds or of pips in many pairs to add to the bubble until it goes. So screaming to people to RUN FOR COVER right now may cost them a good piece of money.
Right at this point it is either surf the trades that are given or step out and wait for the armaggedon to come. But taking positions against major sovereign trends like TODAY is way too risky a business.

The Sun is going to die in 5 billion years, so is going this planet. This is not a reason to blow our brains off right now, is it?

Dear Cesarnc,

I see some contradiction in your post, you agree bubble is going to burst one day, when, i agree no body knows. Would we consider it safe practice to risk thousands of dollars to gain few hundred pips. No way, this is a sure reciepe for disaster. I always feel that traders need to be enlightened on high risk trades. Many of the individual traders have been taken for a ride by these analysts & brokers. Also keep in mind forex trading is not what most of the people think it is. Most people consider Retail traders/ individual traders as forex traders. These retail traders amount to only a few drops in this big vast ocean. When carry trades unwind most of these retail traders are protected to some extent. They have made money already & have stops in place or bail out manually.

The reason why carry trades unwind violently is because big investors have borrowed money at low interest & have invested in high yeilding currencies. Some of these investments are time specified they have to withdraw funds & then convert them into original currency, by the time they do so they have already lost significantly. So just to get few hundreds in interest they are willing to risk thousands. This is a very simplified explanation. Who are these investors, they are big hedge funds, investment companies, etc, etc. They go down big way & bring down the hard earned money of their clients. Is it bad to alert these people & try to save them from clutches of these materialistic sharks.

Lets look at an example. The exchange rates are hypothetical for simplicity.

Jan 1, 2007, 1 NZD = 100 JPY, interest rate in JPY = 0% & NZD = 10%

Mr. X borrowed 100,000 JPY, converted it into 1000 NZD, invested for 1 year.

On Jan 1, 2008, 1 NZD = 70 JPY, intersest rates in JPY =1% & NZD = 10%.

Mr. X cashes his funds, he now has 1150 NZD (due to interest + compounding roughly). He converts 1150 NZD into JPY, which now will be 80,500 JPY including his interest. He has to add nearly 20,000 JPY from his own pocket to return borrowed.

This example is overly simplified, but the principle is the same. In actual world it is more dramatic. That is the reason why carry trades are fundamentally incorrect,& they unwind like somebody has let the cat among the pidgeons.People get attracted to interest, which sometimes is no more than peanuts.

I was lucky enough to learn the proper, hassle free & perfect way of forex trading with limited loss, for the last 3 years, I start with $ 100,000 on Jan.1, by Dec. 31, i usually gain around 60-75,000. I cash all my profits at the end of the year. That amounts for my annual income for next year. Start again on Jan. 1 with my original investment of 100,000. This year as of today i have a profit of 22,000 & still have 7 months left in this year.

Therefore i think i have an obligation to alert people who enter trades which are not justified.

Kzazs,

Whatever my profit factor is, whatever the amount of money I gain in Forex each year, whatever the number of times my predictions are right is, whatever my PERSONAL confidence level to enter a trade is, I would never:

Say the market WILL do something determined.
Say a central bank is NOT GOING to rate interest rates.
Say a current currency value IS due to only speculations & blind buying.
Say carry trades ARE unwiding.
Say a pair WILL reverse big time
and many other affirmations.

If you know that much about markets, you should know anything can be certainly predicted.

If you had came here and said exactly the same but in terms of possibility, probability, personal thoughts, etc., nobody would have told you anything.

So, if you have an opinion, just express it as that. Dont make posts telling others to do something with uncertain affirmations. Dont ever think you know everything about the future of the market (or know something with 100% certainty).

This is my opinion, dont take it as a trade recommendation.

Dear Pabloski,

I dont predict. They are fundamental facts which i penned down. If you want to call it as my opinion then so may it be. I never advise anybody, but i think i have a right to say what i feel is wrong. Just have a look at all JPY pairs, even with expected CPI, JPY is gaining strength. AUD/JPY, GBP/JPY, EUR/JPY, EUR/CHF, NZD/JPY, CHF/JPY, CAD/JPY, GBP/CHF, USD/JPY. Is there anything else i need to mention.

Oh, again man... Im not discussing if what you say is right or wrong, or if your predictions happen or not

I'M DISCUSSING THE WAY YOU SAY IT

what happen to this pair/? down down untill where?
any one long on this pair...?

...yes i was...

Making new lows, outside bearish bar on the Daily chart...

So, any calling for longs again?

Betting against the trend, especially a trend this strong, is more than gambling... it's suicidal.

i'll look to long this pair @ .0700.

another good way to go long on this pair is @ 1.100.

if it should break through 1.300 you are looking at a 'potential' trend change in the process.

USDCAD is making new lows each day, that simply means downtrend continues. Now seems it has broken 1.0800 barrier. Oil is also higher today.

However, we should wait till next week to decide what to do. Its no sense to go short or long now. Remember next week we have Rate Statatement on Tuesday, Current Account on Wednesday and GDP on Friday. This bunch of announcements will lead pair direction for the next week. And again, I dont think traders will considerer the "these are unnaceptable levels for the CAD, it must reverse" phrase. Ill just follow the trend and stick to fundies effect.

I am long on USD/CAD since 1.10 and add long every 100 pips, eventually it will go up and I am holding to this position!