USDCAD trend reversal?

If we were to get a bearish engulfment pattern on the weekly close, then I would look to see a test of the previous lows of .9000.

thats a bold prediction, what is the rationale?

Loonie named Time newsmaker of 2007

The loonie, a currency often ridiculed in other countries for its fowl-inspired nickname, is finally getting some respect.
Time magazine named the loonie the Canadian Newsmaker of 2007, saying the dollar's rapid rise was a sure sign that “something big was happening in Canada.”
The dollar, known as a chronic underperformer by an entire generation, made history on September 20th, hitting parity with the U.S. greenback for the first time since in thirty-one years. Boosted by soaring commodity prices and strong economic growth, the Canadian dollar rose even further, reaching a modern-day record high of $1.10 in November.
The Canadian dollar was one of the year's star performers on the world stage, at one point surging as much as 25 per cent against the struggling U.S. buck. The gains, a source of much pride for some Canadians and much pain for others, made international headlines.
“So for the heights the loonie reached, for the economic upheaval (both good and bad) it brought, and for the rare bird's-eye view that Canada got, looking down on its best friend and biggest rival in the world — where, let us not forget, people rarely fail to find the term loonie hilarious to begin with — the lofty loonie is Time's Canadian Newsmaker of the Year,” the U.S. magazine said.
The Canadian dollar rose above parity for the first time since Dec. 4th at 6:30 a.m. EST Thursday morning. It had struggled in recent weeks amid an expected U.S. economic slowdown, continued turmoil in credit markets and interest rate cuts on both sides of the border.
Given the absence of any major economic or corporate news, strategists attributed Thursday's strength to technical buying ahead of the holidays.
“There are no data releases today, but still some opportunities for last-minute cross-border shopping as the Canadian dollar broke back through parity for the first time in the past couple of weeks,” said Mark Chandler, a fixed-income strategist at RBC Dominion Securities Inc.
Benjamin Reitzes, an economic analyst with BMO Nesbitt Burns, said there did not appear to be any news fuelling the gains, which were more likely due to a big buyer.

USDCAD likely to oscillate around parity for a long time, no?

From Bloomberg:

``Canada is far from a recession as long as the credit squeeze doesn't push the U.S. into a recession,'' said Stephane Goulet, a currency trader at Laurentian Bank in Montreal. ``The central banks are buying some time for financial institutions to clean up their balance sheets. I won't be surprised if the Canadian dollar gets stuck on parity for some time.''

Also from Bloomberg:

The currency's gain may have been exaggerated today, with trading volume declining to less than half of normal, after some traders left for the Christmas holiday, according to Dean Popplewell, a Toronto-based analyst at Oanda.com, an online foreign-exchange trading firm.

It's based solely on technical analysis. The more I look into fundamentals, they support the idea as well. I will show you some charts with my reasoning.

Ok, right now, we are faciing support on the daily timeframe and so I would expect a bounce at this point. The weekly chart, however, is solidly bearish off of the longer term resistance. Now, for a pinpoint entry we would wait for the bounce to take place and if it doesn't, we would instead sell on a CLEAR breach of that support area. By clear breach, I mean it needs to close below the support. Once that happens, I think we're good for the longer haul down.

I'm with you Mike til about .9900. I guess I'll see from there as I'm radical bullish for the New Year.

P.S. Just read the State of California has more people than the entire country of Canada 38 mil to 33 mil -- I've got lot's of pointless facts like that.

Anyone got a comment on the attached chart divergence possibility?

Indicators (Lower Low) + Price Action (Higher High) = signals potential Long BUT also
Indicator shows (Lower High) + PA (Higher High) = potential Short?

Divergence interpretation risk reduction commentary anyone?

An RSI period of 4 may be a bit too precise when looking at a longer trend. My RSI is set to the standard 14 period. It peaked when USD/CAD hit the high and has been following price action down in lockstep ever since.

Yours definitely shows a divergence on the shorter, more reactive setting. The entry signal was a brief window, when RSI didn't follow price to a new high, did you get in early?

The Canadian dollar strengthened to a three-week high against its U.S. counterpart on speculation turmoil in credit markets won't cause a global recession, encouraging investors to buy currencies of commodity exporters.
---Bloomberg


Great end to the week. Met my .9920 tgt overnight. Looks like no rebound forthcoming. I'm looking to sell into the rallies until .9835 or so. Early in the new year, I'm bullish this pair.

Interesting news reports today - feel it's been positive for both CAD and USD. Canadian economy doing better than expected with better retail sales. US Fed finally getting it by offering auctions at reduced rate. Slowing down but improved incomes in US and better personal spending.
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Merry Christmas to all

I know some of you have better things to do than think about trading over the weekend. But just in case you don't. I Wondered if any of you use the COT report in your trading for this pair and if it helps you.

Looks like as of the 12/18, the majority of non-commercial's were long on CAD while the commercial's were short. Net overall was short with the 4 biggest traders short. The actual market result was long, but it seems like looking at the report, that you would surmise things would go short. But then I know very little about this report. Maybe some of you could shed some light on it in the spirit of the season.

Remember sharing is caring...

Bearish engulfing on the weekly chart came through. I'd be looking for a retrace to get in at a good price and then ride it all the way down. See my previous post for my reasoning. We broke support and had a clear break below it. With that, there will probably be another test of it and then the fall will happen towards the end of this week.

What are your price projections?

Price just broke the 0.9900 barrier

canadian dollar certainly has been gaining against majors.

i think still can not get close to even 0.97, remember last time when we hit 0.90 area usd was critical weakness against everything. also we had the $100 oild factor and a Bullish bank of canada.

1 - oil price is not longer close to $100 and will correct before resuming uptrend.(come on we are close to january)
2 - Bank of Canada is worried about growth and not so much about inflation. they promised in G8 they are not going to allow canadian to appreciate too much and they were making their part.
3 - Analyst agree usd is going to rally into 2008, i dont share this, but who knows... it could.

UCAD longed X2.

Short term 3lots, 0.9880 [email protected].
Long term 2Lots, 0.9885 [email protected].

3limit buy order 1Lot, 09820. [email protected] [email protected].
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insurance :

http://i9.tinypic.com/6x0b05j.gif

Hi USDCAD traders,

I usually don't post on the FF because I am still learning price action and trendline on higher TF... I noticed that USDCAD tested the 61.8 Fibonacci level twice and failed on the Daily chart... It formed a " Double Top" meaning a reversal signal... The price action so far is heading to the least resistance which is downward.. On the COT report, the future non-commerical traders are long with the CAD... I've been short since 12/17 @ 1.0110, and I think the USDCAD is set to make another low in the next few months... Trend is your friend...

Also, I noticed the Weekly chart tested the 1.0200 area three times and failed which mean that the 1.0200 is a strong resistance.. I guess price action will head downward....

Follow the trend, not your emotions..

I read somewhere that:

USDCAD has an inverse relationship to risky assets. As JPY crosses and equity markets rally, USDCAD typically trades lower.

RGitt05

Merry X-mas and Happy Pipping New Year...

I attached two charts for USDCAD which are DAILY, WEEKLY..

You be the judge and determine the direction ...

Thanks KGB - best wishes for Xmas. I tend to alter periods dependent on the time chart used. On daily, I find RSI 4 period crossing 70 or 30 is an early indicator for top and bottom, cross-referenced with stoch 8,3,1 crossing 80 or 20 as a trigger. 80-90% of the time it is correct to prove tops and bottoms. Great for planning trade setups with DeM to confirm T&B.

most analyst agree this pair is going to 1.0400 before any downtrend.

but certainly it had to correct cause the crazy uptrend and the correction point is 0.9820. still not there... waiting gets there for another long...

I have been in and out short on the Cad/Usd since around the 1.02 level.
Since we can only trade our opinion, the weekly chart looks bearish to me, the fundamentals give a slight edge to the loonie and the kicker tailwind is the Cad/Yen carry trade which has been steadily making new highs.
Daily MACD histogram is looking bearish
If there is not some outstanding turnaround in the retail sales of the U.S. whereby the U.S. eclipses Canada then I remain cautiously bullish the Loonie.
Thanks
foto

freefall to 9750