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USDCAD trend reversal?

  • #2,921
  • Feb 11, 2010 9:34am Feb 11, 2010 9:34am
Quoting Duce
I'm with you. But because I'm a Canadian exporter, I find myself having to mitigate losses/gains in my regular business when I close a deal at one rate, and the rate is usually much higher or lower once I get my receivable back. So I trade. Sometimes I make some extra money. Sometimes my trades help me break even in my 'real-life' business.
Heard something about hedging the risk of currency exchange rate change? Does the words currency options ring any bells? Swaps? Forwards?
  • #2,922
  • Feb 11, 2010 9:49am Feb 11, 2010 9:49am
By the way I did close my Euro/Cad short and added a euro/usd short at these levels
Have a good afternoon
  • #2,923
  • Feb 11, 2010 1:37pm Feb 11, 2010 1:37pm
Quoting Ulterior
Heard something about hedging the risk of currency exchange rate change? Does the words currency options ring any bells? Swaps? Forwards?

I'm familiar with this, yes. Been doing this for about 11 years now.
Si vis pacem, para bellum.
  • #2,924
  • Feb 11, 2010 2:19pm Feb 11, 2010 2:19pm
I really am bugged by todays Cad strength. I realize absolutely no one believes Bernanke, about removing liquidity over the long haul, but that should be factored in. Did the Fed just flood the system with liquidity today or is this a real move that will continue?
The inflation based analysts were certainly in control of commodity currencies today.
I don't like to chase the market especialy after three down days, so if the stop gets hit I'll stay flat until the air clears up a bit.
If there was a big pow wow of central bankers to even out the load for the fall of the Euro can't really see how they could maintain market imbalances for very long. Therefore have to make the assumption that today's move was legitimate.
Let's see what comes out of Asia in the overnite session.
Anybody out there with some plausible explanation? Please dial in.
Thanks
  • #2,925
  • Feb 11, 2010 4:01pm Feb 11, 2010 4:01pm
Took a nice walk to get away from the screen.
What we know is that this time around the European Banking system is potentialy headed for trouble.
Might be seeing a flight to quality trade in that money comes out of Europe looking for a safe haven. The CHF is not what it was and the Canadian Bks are the best in the industrial world.
Whether it is inflation or a bank crisis that is looming money will be in safe haven in Canada.
  • #2,926
  • Feb 11, 2010 6:22pm Feb 11, 2010 6:22pm
Venge, FOTO, DUCE et al:

Great posts guys. Fantastic intercourse of ideas.

I'm flat lately ( doing the bedside vigil wrt my Mom) & my head won't allow me to think "probability" trades.
However; the recent action on this thread has dulled the burning in my gut (from drinking hospital vending machine coffee). {How the heck they can get away from dispensing sulphuric acid in styrofoam cups-& with no warning label disclaimer-should be looked into!}.

It is truly gratifying to see the input from both sides & for different time frames; that enables one to make a more informed decision for his/her decisions.

Teknikally: FOTO: watch yur E/CADS-The W MacD is O/S, $ @ low BB & STO is O/S. There is still room to go down mayhaps ( W charts are slower to respond) D tf has $ outside low BB , STO O/S but MacD heading down -no sign of +ve Div.
Loved your reasoning for entering short on this pair!!!!!! ( this is what a successful thread is about)!

BEAVER:
is @ prev resistance 50ema . MacD is up ( but is < H20) bearish. STO is up.
W STO is down,MacD is down: the 50 ema is F...l.....a.......t( that's what the W chart looks like).

Interesting (to me, anyway) is on the W tf: from June/09 - present; the channel appears to be 90.74 hi- 79.40 lo. Just a thought: break up= recovery? OR break lower= 2nd leg down in recession?

US/CAD: Wtf : STO is o/b MacD < H2O 34ema<55ema.

PS: Clouds-beauty charts. How the frig do you post the charts here????
  • #2,927
  • Feb 11, 2010 7:32pm Feb 11, 2010 7:32pm
Added a short at 1.0514. I scalped the EU just now and will apply those profits as a SL on this trade. Let's see what happens over night. I'm still looking for 1.0411
Si vis pacem, para bellum.
  • #2,928
  • Feb 11, 2010 7:51pm Feb 11, 2010 7:51pm
Quoting Scarecru
Fantastic intercourse of ideas.
Wholeheartedly agree. Some interesting ideas bouncing around!

Scare, sorry to hear about your mum.
  • #2,929
  • Feb 11, 2010 8:02pm Feb 11, 2010 8:02pm
Quoting Duce
Added a short at 1.0514. I scalped the EU just now and will apply those profits as a SL on this trade. Let's see what happens over night. I'm still looking for 1.0411
Looking pretty still, isn't it? Last three hours a huge range of...10 pips! Bloody exciting! Duce, I am looking to get short here, too. Although, I'm waiting to see if this USD/CAD thing will pop a wee bit higher to 1.0520/25. Preferably a jaunt up to prior intraday support arount 1.0570 would be even nicer... Not holding my breath for that though.

IF I get short, I'm looking at 61.8% Of 1.0225 - 1.0780 at 1.0440 as 1st potential target, then 1.0410ish (high Jan. 12-13), then mid-1.03s (prior support/resistance area), and finally 1.0300/10 area (big fig., Jan 20 low).

Would look at covering on bounces at these areas depending on how strong a bounce.

Well, best of luck to us all!
  • #2,930
  • Feb 11, 2010 8:09pm Feb 11, 2010 8:09pm
Quoting foto
Took a nice walk to get away from the screen.
What we know is that this time around the European Banking system is potentialy headed for trouble.
Might be seeing a flight to quality trade in that money comes out of Europe looking for a safe haven. The CHF is not what it was and the Canadian Bks are the best in the industrial world.
Whether it is inflation or a bank crisis that is looming money will be in safe haven in Canada.
Sometimes you just have to shake your head and wonder what the hell is happening.

Some of the CAD strength could be as you suggested - flight to quality. And I think the rest could be explained away from gold, oil, and stocks rallying throughout the day - the ol' risk on play.

Commodity currencies did fairly well today, and looking at CAD crosses, loonie strength was pretty solid across the majors.

Just my two cents...
  • #2,931
  • Feb 11, 2010 8:19pm Feb 11, 2010 8:19pm
Quoting Duce
I'm with you (Clouds). But because I'm a Canadian exporter, I find myself having to mitigate losses/gains in my regular business when I close a deal at one rate, and the rate is usually much higher or lower once I get my receivable back. So I trade. Sometimes I make some extra money. Sometimes my trades help me break even in my 'real-life' business.
Hi Duce,

Just curious, but have you ever thought about doing forward contracts to lock in the rate on your A/Rs? Seems like they would a perfect fit to hedge your exchange rate exposure... Typically you put 5% down as a deposit and then when the settlement date comes up you settle the contract for the principal amount.

Cheers
  • #2,932
  • Feb 12, 2010 3:35am Feb 12, 2010 3:35am
Hello everyone,
Scarecru may God keep you and yours safe.

Well Europe has no money to bail anyone out. The commodity tug of war will be in ernest today. Had put on a Euro/Cad short for overnight and just closed it. Hope I didn't act too early. China's move means they have far too much capacity and a brooding loan problem in Asia. The forces of deflation are gathering

If US retail sales are weak this brush fire should really get going.
  • #2,933
  • Edited 4:58am Feb 12, 2010 4:45am | Edited 4:58am
If the Cad keeps strenghthening in the face of the negative commodity news, then this move must be the flight to safety and we are headed towards another leg of the banking crisis.
The really long term charts, monthlies show an enormous completed head and shoulders formation on the Euro/Cad with a lower price target at 1.3500

Just put the Euro/Cad short on again. Simply makes no sense to argue with the market.
  • #2,934
  • Feb 12, 2010 6:37am Feb 12, 2010 6:37am
Warning: Don't listen to me for short term trades.
  • #2,935
  • Feb 12, 2010 7:32am Feb 12, 2010 7:32am
With the London close approaching the USD trend remains upwards. The afternoon U.S. session is really unimportant. What counts is the trans- Atlantic flow of funds.

Whatever or whoever attempts to control the USD outside of the prime hours is really fooling themselves. Yes I truly believe there are National Governments that do this all the time. Think as you wish.
  • #2,936
  • Feb 12, 2010 9:55am Feb 12, 2010 9:55am
Quoting foto
If the Cad keeps strenghthening in the face of the negative commodity news, then this move must be the flight to safety and we are headed towards another leg of the banking crisis.
The really long term charts, monthlies show an enormous completed head and shoulders formation on the Euro/Cad with a lower price target at 1.3500

Just put the Euro/Cad short on again. Simply makes no sense to argue with the market.
EUR/CAD just looking sickly...One of the traders at work said he read something about EUR heading to parity over the next 18 months... Not sure where he read this or if he was talking about USD or CAD...Interesting though.

As for continued CAD strength, I agree with the flight to quality (safe haven) call. If we look at the current situation where the market seems transfixed on sov. debt, then comparatively speaking, Canada is doing pretty good on that front.

An estimate of Canada's debt-to-GDP for all layers of gov't sees 79% for 2010, and Japan 227%, US and U.K. 94%.

Overall, if global demand/growth keeps up this will likely see the CAD (and other commodity currencies) continue to gain. Against the USD, I am not quite sure how this will play out. Positive news for the US should also be positive for the CAD seeing as how the two economies are closely linked. But although we could argue the CAD gaining against other currencies as the US recovers, maybe against the USD the CAD would remain roughly neutral? But add into the mix debt in the US, etc, and perhaps we could argue a case for CAD strength...A little foggy on this pair longer term...

But against the EUR, GBP and JPY I think it is safe to say that for now the CAD looks more promising.

Once again, just my two cents given at a discount!
  • #2,937
  • Feb 12, 2010 10:01am Feb 12, 2010 10:01am
Quoting Scarecru

PS: Clouds-beauty charts. How the frig do you post the charts here????
Click on Attachments -> Choose File -> Upload -> Then click on Attachments again and you can select which one you want to post.
  • #2,938
  • Feb 12, 2010 11:37am Feb 12, 2010 11:37am
Hi Vengeance,
You make good sense. Was looking at the weekly on 3 year with a 20 & 40 sma also with a 2.5 std deviation bollinger(20 sma). looked as if the 40 which is still downtrend contained the rise in USD/CAD for past two weeks. The 20 although still descending has slowed and is now forming a sort of support.
I am still long (stop not hit but close, 103.70) but this coming week if the pair doesn't turn up with falling commodities then the strength in the Cad is coming from the fall in the Euro. Similar to the big fall of Euro/Aud
My original analysis placed high likelyhood with the deflation scenario taking hold over everything else.
This analysis may be flawed as the Euro is more the mess then I thought.
Everyone have a great weekend.
  • #2,939
  • Feb 12, 2010 11:38am Feb 12, 2010 11:38am
reloaded longs at 1.0516
stop 1.0506
Friday madness
  • #2,940
  • Feb 12, 2010 12:02pm Feb 12, 2010 12:02pm
Quoting Clouds
reloaded longs at 1.0516
stop 1.0506
Friday madness
Not making it easy to find an entree here. SL moved below 1.05.
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