USDCAD trend reversal?

Did some researching on the info from last week's posts. Have more learning ahead of me.
Decided that in the interim, I shall stay with what has been profitable for me.

I am grateful to have the additional trading perspective for LONGER term trading decisions provided on this thread Re: contrarian trading.

Since I do not have huge amounts of capital;my trade decisions are focused on daily positive pips. Not a fortune in the making, but a living.

M Loonie had an up TL break (Nov 07-Jan 10) @ 1.0320. Indicators are down. Same with Wly.

Retrace to 1.0100 with 0.9980 support. MacD appears +ve divergence

Heavy central bank intervention is going on right now to support the EURO. Started with the 2 AM open.

Look at your USD index charts. If one is to believe that charts do not lie.

Went flat on the USD/CAD hedge. The markets will most likely percieve that the only outcome for a falling EURO would be to inflate away the problem. That has been the theme for some time and so far in the overnite session the commodity currencies have been strengthening.

Thought is that the stronger economies will pick up a bit more load from the falling EURO rather then the whole thing falling on the USD.

FOTO: would euro/us be a good place for delusion recognition? My take is the Euro will parity (E V E N T U A L L Y)

I am awaiting a US$ bull mkt. When gold starts to lose its lustre, is my indicator.

Scarecru,

I think it is a delusion that debt can be piled upon debt in the hopes that economic recovery will come before default happens. The Southern European countries are rolling the dice based upon economic projections of growth to come. If that growth fails to materialize then default is the only outcome as the problem is too big for even the Central Banks + the IMF to fix. Nobody can bail out a whole continent.

If default happens then surely Germany will go its' own way and the Euro will fail as a viable currency. Governments are well aware of this possibility so any moves to tighten monetary policy before growth is ripping will not occur.

You will hear a lot of jawboning and people like the Feds Hoenig will make statements to whet appetite, but actual action will be scarce.

If the Bond markets rebel then all bets are off. It is a cat and mouse game. How long the mice (central banks) can avoid the market response is the speculation.

There is much history of real world events that has come out of Europe. I trade keeping that in mind, so as to avoid getting caught up in the day to day nonsense.

I remain bearish on the Euro because the only way to keep it whole is for the Southern countries to have a weaker currency. If the Euro gets stronger from here then default is the only outcome. It becomes a question of how much weakness Germany will tolerate. Keep in mind that Germany is a country that was involved in two major world wars, a hyperinflation and endured the partition of the Nation for many years. They will not follow the inflation is the cure mindset willingly.

Can world growth be bought by Central bank stimulus? It has never happened in real time before. The only outcome is default via inflation. So we return once again to how the Bond market reacts.

The other side of the Atlantic is where the solution is or is not to be found. The O team thinks he can buy an election with cheap money.
The end game is where is America at any longer? Trading from hope is never good but it is the situation.

Some people are capable of trading from both sides. Myself cannot. So strategy is based upon trading from a scenario based outlook, then implementing trades based upon percieved price action.

We are in markets that doubtfully anyone has experienced before. We also cannot trade yesterdays news. Therefore those who can think clearly and act upon those thoughts will prosper. Can statistical analysis give you some idea of probability outcome? If so then stick with a purely technical system. If using the mind to devine a favorable probability outcome based upon ongoing events and a historical perspective, then incorporate real world events into your methodology.

Money management can protect against overtrading and gambling, but the best money management on earth will not take a losing method and make it profitable. Each has a purpose. Keep in mind also, you are trading in the olympics of thinking. With so much to gain in a limitless market you will be going against some of the brightest people on earth.

It is an achievable goal, but done so soberly. Find your niche, rinse, wash and repeat.

FOTO: timely post my friend.

One blogger,I respect; posted an article re: E/U parity.

Summary: Greece/ Germany 10 yr interest rate spread is @ record levels (esp. during last 2 weeks). inherent risk of sovereign default.

Germany's incentives to stay in EMU are fading.

External Debt as % of GDP: total PIIGS 199.3%

Gov't funding needed(as % of tax revenues) 119.2%

He also, suggested a US$ bull mkt resumption in January.

I shall pay more attention to E/CAD

Heh Scarecru,
Sometimes it comes out right.

Thinking that the Fed may actually test the waters today on its path. The Euro could use a little more relief so as to prevent default.
Just a toe dip towards removing the emergency monetary stance.

In the mean time the bezerk Euro/Yen carry traders just don't get the message that debt problems will persist in Europe. Greed has run amok in this pair. So will be a good candidate for short, if the German lifeboat misses the appointment.

Entry upon a quick sharp break on the hourly is what am looking for saying somethings up.

Usd/Cad is starting to look interesting as well. Suprising moves to the upside on any equity weakness, with slow retracement on the reaction.
Sustained close above 1.02 would indicate that global liquidity is slowing.





Missed the Euro/Yen short. shortly after made the post, S&P came out with the downgrade for Spain. Never had the chance it just blew out. These markets are like loaded blast zones, if one takes a position in anticipation of a move the market gets pushed against.
Then comes some announcement out of the blue that goes the way thought big time. Trend is still for a strengthening USD. Am holding most Euro shorts for the longer haul, and will just ride out the volatility. Also remain long small USD/CAD

FOTO: D loonie suggests long (for short term)$ @ 50ema (down slope) which is also Prev Sup 18Mar & Prev Res 18Apr.

W & M charts suggest Loonie (Us/Cad) still should still remain < parity.
I suggest that this fact bears noting (no pun intended).

Still focusing on E/Cad: M chart $< Feb/06 lo with indicators going south.

What's happening E/CHF: D tf nice little triangle (or wedge) or "flat-lining" since Apr 14 {if this was an "EEG", they would have pulled the plug on this patient} SNB or other CBs have a vested interest here?

Scarecru,
The price tag for the German part of the bailout is more then they are willing to Pay.

As my prior posts suggest the problem in the Euro that is affecting all markets is the structural trade imbalances within the Euro Zone. The economies are not self sustaining so no matter the size of the bailout package the underlying problems causing the situation are not being addressed.

A bad idea cannot be made good by throwing someone elses money at it.

Policy makers will be the bankruptcy of us all.

How to trade it. There are those who believe otherwise so the market will be subject to volatility as positons and general business money flows swing back and forth.

If the thesis proves out then at some time a lower Euro will come about. Rather then attempting the exact timing of the move I use a large stop.
There is just too much intraday events to prognosticat without ending up overtrading.
Currencies do not change value in an instant for the most part. An instant is a days data in currencies.

Since I choose to trade trend rather then volatility, patience allowing the market to digest info is what a wide stop allows.
Rating agencies apparently are being more vigilant and are acting sooner then they have in the past. Downgrades continue to affect the price.

Some (not all) of my charts are evidencing that a new downleg on the Euro is at hand. If the Euro weakens some more, say down to the 1.30 level or lower then it may impact USD/CAD.

Default in Europe will be deflationary. A rescue package implemented with US funds via the IMF is clearly inflationary. The Fed is being proposed to be staffed with Obama doves. The markets will perceive inflationary tendency from that.

Will one force dominate, yielding a trend? That still is to be seen.

As to the Euro/Chf the dailies show flat and I do not have a computer driven trading program that seeks to scalp for small gains. The SNB is saying Europes problems will not be put onto us. We are too small to shoulder trade imbalance problems. So they are doing what the Swiss always cherish doing, they are neutral.

May just sit this weekend out. Might be a short covering rally going on as the bailout package would boost the Euro short term. Really do prefer to trade country relative economic strengths rather then will they or won't they.

If 20 % unemployment in Spain is good for the Euro then perhaps 30% unemployment will be better. Absolutely no shame for the Yen pairs. Business is business and let the governments implementing the policies chart the course.

I just logged in now and noticed the CAD GDP and IPPI numbers. Big surprise....NOT !

The BoC (Carney) says it will rais rates in June/July. I bet 10 pips the US Fed will raises rates first.

Carney never said BOC will raise rates in June/July, it's the "experts" who try to put words in his mouth.

Monthly Doji . The battle for 1

You phrased correctly what I wanted to write/say. Thanx.

I still think Fed will raise rates before BoC.

Teks on M tf make me a bear.

Especially, should 0.9928 be broken downwards.

Still bear on ESA/US pair (i.e. Euro States of Austerity/ US).
Teks still suggest parity ( sound familiar?).

At present, have long on loonie pair eyeballing 1.02-- tp

Watching "beaver", when she goes down; mayhaps, become a loonie buyer.

FOTO, DUCE, VENGE: require some assistance; if you please.

Read a blog today, re: the "prophet of omaha" strongly (my take) supporting derivatives. My previous thought way back- was that he (who cannot be named) was anti-derivative. Any advice would be appreciated. (by the way, what the heck are derivatives?)

Just waiting for the market to digest everything going on. ECB has had a rather large blow to credability and the Euro is now just another piece of paper same as all the others.

Official pronouncements to the contrary do not change what has happened.

Will the US consumer bail out the rest of the world again. Kinda doubt it
but we live in strange times.

Keeping a close watch on the Aussie as since we are supposedly in recovery phase then risk currencies should gain with rising rates. Premise being that a sustainable growth pattern will support normalized rates. Continued selling in AUD/USD would say the markets are not buying into the scenario.

USD/CAD am trading the weekly from the long side to stay out of intra and interday Jekell and Hyde equities.

Very wise.

FOTO: my OZ Dtf last week had up TL break with TPP 0.9084.
Fundamentals suggested (to me) otherwise. My teks still say "sell".

The PIP GOD was good to me with my short term US/CAD long. I am still long - eyeballing 1.03 (03/26 R). MacD > H2O says "probable"trade.

When I be long the US/CAD, I am selling BEAVER ( double your profit).

Then there is the Euro ( may its soul rest in peace). The missives that you had posted suggested its demise.

CAD info & NFP due out this week: I shall probably be out of US/CAD & await the "dust settling" for the loonie.

Euro: I shall sell. Thought that I used the P word many posts ago.

65B euros estimate to 110B IN A COUPLE OF WEEKS for Greece!
Think that I shall check out the E/Y chart afore, I go home.

Was suprised how easily the 1.3000 level fell in the EURO/USD

Do not like chasing a market but have added a little more short on this mornings testing of the 1.2900 price support

Implementing austerity in the Southern Euro zone is a lot of talk that the bond markets will not entertain. It may be the right thing from financial perspective but the civilian population is not going to take the hit for the obvious screwup of the ruling political class.

Think the Euro/Gbp remains a good short and the upcoming election no matter what means the end of Labour control of the U.K.

USD/CAD is looking absolutely perky. These moves to the upside are strong and not all related to short covering. The strength of the USD appears to be for real and is now affecting commodity currencies.

At some point in time the trader must make the call and live with the consequences of those decisions.

FOTO: RE: Grasshopper/ Ant reference last year & the Greek demonstrations this week.

Listening to radio show today, a question posited was: "..were there government unions demonstrating... what ratio of gov't to private unions would those demonstrating be"? Point being: the pensions would be severely compromised.

2nd point that was noted: since the recession/ depression; what is the ratio (in employment figures) between government (public) & private sector job creation?

Would never have picked up on these pecuniary thoughts before. Now as I wade through the list of readings that you provided, I have a different perspective on the News.
Thanks