USD/CAD towards parity 1/1 ?????

Hi guys

3 months ago UsdCad was around 1,1820, currently it's around 1,0575....I followed it and made some pips ...

So my question: is there objective economic reason, for this massive drop ?????

and will it go to the parity what odds for this event ????

So clearly what's your opinion, you expert traders....perso I really don't know if this southern train will stop soon or not

Lot ot pips for you my friends

BTW I found here some answer I'm ready to believe.....

http://economics.about.com/od/exchan...ian_at_par.htm

Who knows what are the reasons from a Fundamental Analysis point of view. I personally dont care. Over time I have come to the conclusion that trying to implement a F.A. outlook into my trading helps me little while it indeed confuses me a big deal.

Example: XXX/YYY currency pair is in a clear downtrend, but yesterday the Central Bank of country ZZZ said this and that, plus Oil market is doing this and that and the YYY stock market is going ape as of lately. Hhhhmmm should I perhaps begin to search for long entries on XXX/YYY? And sure enough I end up taking a half-assed trade that triggers my stoploss right away.

The less I look into fundamentals and the more I focus on searching healthy trending charts to swing-trade them, the better I perform.

DISCLAIMER: I am not saying Fundamentals are useless. Im saying that *I* only but get confused by them.

i'm also realizing that fundamental analysis on currency market is terribly difficult for me as opposed to stocks. Everything you can think of affects currency like stock market, speeches, banks, politics, etc. Plus you have to take into account that you have to analyze two currencies against one another, so that's twice the amount of analysis!!

It's easier on stocks where you just focus on one single company and only factors that affects it.

Seems to be heading lower by looking at simple charts. I do see a line of support coming in at around 1.0100-1.0200 in the weekly chart. I belive long positions should be avoided until a clear reversal is in place on Daily charts.

Even though all points south , some support in the weekly chart is seen at this point. The only trend line visible that could provide short and medium term support. This support could be between 1.0250 & 1.0350.

For USD/CAD, I think the FA is pretty straightforward; Canada has a slightly lower bank rate, which over the past 5 years has been more than compensated for by the ccy value; it's economy is about 2x as dependent on oil and commodities as the US, and with the current boom in Asia, that means big inflows; it isn't as tied to risky investments as the US (like the sub-prime), at least to the same extent, which encourages capital investment; it has a more stable political system (another + for investment) and isn't mired in a prolonged war, which is pushing the US even further into debt. The Cdn federal gov't has been running a surplus for a number of years now, which means more tax money can be spent on infrastructure, rather than debt servicing (which tends to create economic outflows if large amounts of debt are held outside the country).

A particular worry is that the next 2 years of the US political scene is very clouded; for example if Clinton becomes the US president we can expect significant changes to the economy as a proper medical system is put into place and the HMO lock gets broken, which will be far from painless for investors. Defense industries form a big part of the corporate structure, a president favouring a quick reduction of overseas involvement will cause them grief. In both cases one could expect the big corporates to already be hedging their bets elsewhere, maybe offshore. The Canadian health-care system (while subject to endless talk & lots of tinkering) is going to pretty much stay put, and defense is not a big aspect of the Cdn economy.

Another aspect to take into account is that the USD has been the reserve & vehicle ccy for world trade for pretty much the last 50 years. Originally a neccessity borne out of the ravages of WWII, it was carried as such for too long, especially once the US went off a sound money principle maybe 30 years ago, and has been wandering further and further away from such, particularly after the dot.com crash. It's led to a massive accumulation of $'s in the hands of big funds and CB's, to the point that no one really wants to hold it anymore. As long ago as the early 90's CB's should have been pushing towards reserves based on bilateral trade, but old habits die hard. But as they do so now, one can expect an increasing volume of USD to find it's way home, in exchange for other majors (particularly the Euro, and CNY if/when it is finally tradable); smaller ccy's will benefit (or not) in line with their fiscal & monetary policies, and trade demands.

And in the longer run, there's the threat of global warming. If it comes true, the major Midwest growing belt which has been a big strength for the US over the last 150 years is (in theory) going to push north, and there's going to be increased demand for hydroelectricity, and even water, in the US, which Canada has in abundance. In the case of the latter, there's a lot of resistance to making that into a commodity, so if it does start getting shipped to the US (particularly So. Cal), it'll come at a high price.

Finally, there's the basic issue of social stability. I realize many Americans will find my comments on this unacceptable (so I apologize in advance). But it's hard not to see from the outside the growing separation between poverty and wealth in the US and not be concerned for the future of the country; throughout modern history it's been a prelude to social upheaval. Perhaps with an administration more in tune with problems at an individual level that will change. Or maybe the US will have to suffer through a Trudeau-type leadership (which tanked the CAD for a number of years) before a more generally acceptable middle way is found. The US also suffers from extraordinarily high rates of incarceration - especially among minorities - again, a sign of significant underlying problems. (Funny thing is that most people don't realize the biggest recent growth in those stats happened under Bill Clinton), FWIW, Canada is not immune to these problems, but they are more tempered in that respect, particularly to the big drivers in US crime stats, which are (soft) drugs.

Just my 0.02$ (Cdn...)

I think major problem with us is that since oil price is so high and if us if you do not have car you can not go anywhere.

and every thing price goes up. therefore not much people able to buy expensive items.

Also due to China economic is booming. therefore, a lot of items are form china. so us does not have that many job is avilable.

Congratulations Halifax, I found your analysis very interesting, and I do agree with your arguments.
On my opinion the question about parity is not more, will it happen, but when will it happen....

Resistance on the 1H chart might take it down to 1.0450 if it holds.