USDCAD trend reversal?

testing a theory. let's see what happens.

Tough call on the USD. We know China wants a weak dollar (exports and the peg) and will do whatever it can to accomplish that. Europe needs a weaker currency to bail out the southern tier countries without crashing its' bond market.
Volatility on the 4 hour charts which has held true while the dollar rallied are at extremes and would be technicaly the places of entry.
Quite a dilemma.
The long term scenario is for a weaker Euro and thus a stronger USD, really didn't like todays market action for a dollar bull. The ECB is not going to easily resolve this matter. Maybe time to put on the blinders and wait until morning. Stops are in place.

Completely wrong. China wants a weaker Yuan and stronger dollar, being primarily an export nation whose #1 customer is U.S.A.

Yes if the world was willing to kiss their butts somemore I would agree. There is a minor skirmish of trade barriers via tarrifs between most everybody and China. If China dropped its' dollar peg now that would erupt into full fledged political confrontation over trade.
Thus my thoughts are that China will intervene in currency markets to prevent the USD from rising and thereby keep the yuan weak relative to other nations by keeping the dollar weak.
Even though they have little respect for Obama if they weaken the Yuan against the Dollar the US will retaliate. Obama needs jobs to save his party at election time. He sees China as a competitor unlike the Bush administration.
Sorry if I didn't give enough info on the prior post.

I don't know about that, man. China needs U.S. no less than U.S. needs China. This has been written about many many times in great detail, and is the source of the neverending trade deficit story that comprises the current status quo that works for both sides - for now. Economic confrontation between China and U.S. doesn't benefit anyone. The only way they could effectively weaken the dollar is by cutting their UST bond purchases, or stopping altogether. Neither of which is very likely at this point, as they need a place to park all the money received for the cheap exports, effectively perpetuating the grotesque trade imbalances mentioned above.

Please elaborate - I got some short signals this morning into Tokyo open and decided to short March Crude.

There are economists associated with the Obama administration (truly wish I could remember their names so that this is not hearsay) that believe that the U.S. has been too cozy with China. (possibly Paul Krugman, but not sure)Trade unions being a political force would be in this camp as example.
The tarrifs tit for tat thing is real. Steel producers have been successful in arguing anti dumping (could never quite get that approved under Bush) China just came back with the tarrif on Chicken (U.S. major supplier for China) Something as mundane as wrapping ribbon got slapped with I think the number was 240% tarrif due to a ruling that China was subsidizing its production. (Protect remaining U.S. textile workers?)
Russia just closed some major market site which was loaded with Chinese goods (apparently bringing goods into Russia, customs does not give certification) Europe has done some protectionist moves as well.

China has a hard time pleading poor little me, with an economy that is overheated from inflating the domestic money supply from its international currency manipulations.
Ultimately we just use ideas to justify our actions. It is only our individual take on the reality of the situation. I am not arguing that I am right, this is where the things I read about bring my mind to.

Not to belabor the point, China has a large holding of US currency it would not be out of the question to sell some and buy up other currencies to weaken the U.S.D The actual composition of their currency reserves remains a State secret. Their modern export economy was supported through currency, they of all countries know how to manipulate.

Interesting rehash, although the majority is old(er) news. For China, I'd have to agree that from their perspective a strong buck and weak yuan is in their best interests not only for exports but also to retain the value or their 700B+ (closer to 800B) holdings in treasurys. ANd like a previous post mentioned, there is def, a case of you scratch my back and I'll scratch yours between the US and China.

As for Europe, I am sure they would also desire their common currency to weaken to make their exports more competitive.

Yet which way will the wind blow...? I couldn't care less as either way I'll try to profit off it. Although an intersting note is the COT report showed traders short the EUR to a tune of roughly 8 billion! All time high for short positioning. George Soros breaking the bank of England comes to mind...Personally, I would love a weaker EUR so it would make traveling there cheaper. I guess I am just selfish.

That's wrong too, Subdude. China is pegged to the greenback. They really don't care where it is, as long as the US buys stuff from China. Hillary Clinton went there last year to put their minds at ease. Meanwhile, back in the ole US of A, Obama has been talking protectionism. Quite the conundrum.

Evening FOTO & VENGE: what have you guys created?

I was out of the mkts today ( thank the gods)trying to buy books ( ala,FOTO) & changing indicators (ala, Venge).
Looks as if the -ve MacD hiso & STO div is/has taken direction. I shall await the the retrace then buy cuz RSI > 50; 30X'd >50 & MacD > H2O.

goodness gracious and goodnight

Yo DUCE: last I read of you(Dec 24)You had CAD longs! I asked Santa to assist you with them. How did he treat you?

Scarecru, your post made me look at Q4 2009 trading diary up to today.
Pretty successful as far as balance of my account (up 38% for 2009) but I had a couple of trades that cost me good pips, which i should have closed out much earlier. Two bad trade examples were in the UC where i took a long at the beginning of the month - OCTOBER - (at 1.0850) and another long at 1.0746. Scalped the whole month in between, but these trades were open. Then November/December were essentially sideways for me.

When we hit 1.0411 in late December I took some more longs, Up it went, only to watch the UC drop a few hundred. I scalped this down, but still had 5 long positions. I cut my losses on 2 positions when we hit 1.035 area and then I longed again once we hit my fibo at 1.0247.

I bagged a fair amount of pips on this ride up, but I did close out my 2 stoopid OCTOBER longs this month when we reached 1.0744. Again, took a loss on those two trades, but I had a tonne of positive pips which absorbed the red pips very easily.

Now, news says USD should go up. My chart says were at some resistance. My government says it wants a weaker CAD. And Obama is talking (between the lines) about buy American.

I want the greenback to drop 200-300 pips and this could happen. But right now I'm totally flat in this pair.


N.B. I edited my post to read October. Those stupid trades happened in October, not December.

Got out with 5 pips. Not sure what the hell is going on.

Hey Duce,

I've never read your posts or seen you on here in the last little bit that I can remember, but welcome (back).

Some interesting posts so far, though. I was thinking of getting short USD/CAD at current levels...I was slightly bullish yest. and now slightly bearish after another failed attempt at 1.0780s overnight. Was thinking we could see 1.03s if this pair manages a break through 1.0580-1.0620 area.

What are you seeing here?

Cheers,

Venge.

On a personal note, I suffered the loss of a very clsoe friend on December 26 and I was walking around in a daze for a few weeks. I was lurking but not posting. But thanx for the welcome.

I'm thinking of shorting too, but not sure yet. If I do, my SL would be at least 100 pips over 1.0744. I'm also watching 1.056x as a sign to go down further. A solid close over 1.0785 says up to me.

I no longer trade the asian session once it opens. But I do watch it.

It appears EIA oil inventories data delayed until Friday.

Hi Duce,

Sorry for your loss!

I'm looking at the 1.0690-1.0715 area and thinking about jumping in on a failurre...I'm with you as far as trading the Asian session goes, but once in a while I might dive in. Regarding the short idea, with trade balances out tomorrow a.m., I am a little leery of getting in yet, so I might just temper my patience with prudence here this eve.

I would think a break of 1.0780 should see mid-1.08s tested. Although this pair is definitely finding some headwinds up there. Either way it's gotta break soon as this whole range is just getting stale.

Cheers

Folks if you are having difficulty getting usable info from your charts, and these market gyrations give you the hee-bee jee-bees. Try a longer time frame. If 4 hr appears random maybe look at the 8 hour for the patterns you trade.
you can adjust your open risk by trading fewer positions while keeping your portfolio risk constant.

These trade imbalances are deflationary as Bernanke is no longer in the cat bird seat and is unable to monetize them any longer. Just an opinion