USD/CAD

While I can appreciate differing opinions, I do not follow your reasoning behind going long. Is it a technical analysis that "it HAS to go back to .99"? I'm not saying it can't retrace back to .9900, but I can't afford to ride it down to .95 first...

I agree with you that I believe things are improving in the US. ~75% of Canadian exports are delivered to the US... I fail to see how increasing demand of CDN exports would be negative for the loonie...?

I guess I'm looking for clarification why the USD would gain against the CAD, assuming the US continues to slowly improve, EU continues to sputter along, and China continues to grow albeit at a slower pace.


Also, my overall medium term sentiment is short USD/CAD and long CAD across most pairs.

Long or short ?

You know people like you just do disservice to FF.Panic types who scream sky is falling sky is falling.
PA could go up Without a fking reason!Same way Euro is going up without any fundi reasons.
You assume once again Forex operates with certain logical reasons.Nope it operates for sure but its not logical.
All I am saying is market has a life on its own and you can not categorically say "The only reasons the USD/CAD will turn bullish is surprise global crisis (e.g. EU kicks out the bankrupt members, China comes in with negative growth..."
PA most likely will go up Without a fking global crises!Why?Because it can!
Save your panic rhetoric.

I have 7 orders Long but nobody knows 100%.Best you can do is to wait market open and determine the direction.
Personally I think it hit major support at 9770 and could not break it.Notice that Euro passed 128 however Cad actually went up to 5785 same period.
Clue is right there.It hit bottom at 9770
This is just my reasoning and I could be 100% wrong hence we are called speculators.

If eurusd move up does it means usdcad will move down ?

Yes. Euro sets the tone if you will and other USD pairs follow.
http://www.forexhit.com/images/curre...ions-table.gif
<h3 style="text-align: left">Currency Correlation in Forex Trading:

</h3> Currencies are priced in pairs, no single Forex pair trades completely independently from all the others. How one currency pair moves relative to the any other currency pair is the correlation between those two pairs. While trading Forex, the understanding and keeping a track of currency correlation or forex correlations is very important especially if we trade with multiple currency pairs simultaneously.

Let's say, currency pair "A" moves in the same direction as pair "B" and we have been following up pair A's move very closely. We expect it to go up and we buy. We have not been following up pair "B" so closely and suddenly we look into that and the fundamentals or technical analysis suggests us that this pair may go down. We short sell. What eventually would happen that we would end up having profit on one pair and loss on the other as they moved in same direction. Similar case would happen if we simultaneously go long or short on two pairs which move in opposite directions.

Once we know about these correlations and their changes with time, we can take advantage of them to control our Forex portfolio's exposure.

Forex Correlation Value Range:

The currency correlation coefficient ranges between -1 and +1.
A correlation of +1 implies that the two Forex pairs will move in the same direction 100% of the time. A coefficient of -1 implies the two currency pairs will move in the opposite direction 100% of the time. A coefficient of zero implies that the relationship between the currency pairs is completely random.
Positive Correlations:


A positive figure but less than +1 means that the currency pairs generally move in same direction but not always. A value closer to +1 means that most of the time they move in the same direction.

Negative Correlations:


A negative figure but more than -1 means that the currency pairs generally move in opposite direction but not always. A value closer to -1 means that most of the time they move in opposite directions.

How to Interpret the Currency Correlation Tables:

Some currency pairs may be correlated strongly and some may not be so strongly correlated. The pairs we need to watch are the once which are strongly correlated, either positively or negatively. Currency pairs which have strong positive correlation, will tend to move in the same direction, most of the time. The pairs which are strongly but negatively correlated will tend to move in the opposite direction, most of the time. Please note that volatility may be very different even if the pairs are strongly correlated.

Interpretation of the correlation coefficient values:


Correlation Coefficient Interpretation of Correlation 0.0 to 0.2 Very weak to negligible 0.2 to 0.4 Weak / low (not very significant) 0.4 to 0.7 Moderate 0.7 to 0.9 Strong 0.9 to 1.0 Very strong
How to use currency correlation?

Well, your slow speed because of an occasional traffic jam on the expressway does not really indicate that the average speed you would end up on the road will be same.

Currency correlations are dynamic and changes with the time. Take a note of the correlation of the past few days and compare it with the value in the long term average, say past one year. If the short term value is far different from the long term value, maybe it's offering you a chance to place a trade, but how?

Let's say that currency pairs A and B and C have a correlation value in the range of 0.90 to 0.98 during past one year. It means that these all move in almost the same direction, most of the time. When currency pair A moves up, currency pair B and C also move up. Suddenly you notice that during the past one month or one week the correlation value of the currency pairs A and B is 0.10 i.e. moving in the same direction but not always but the coefficient value of A and C is almost in the same range. To clarify as an example let's say three cars are moving towards the same destination. Now for some time 2 remains moving in the same direction but the third falls behind. But we can assume that ultimately the third may have to catch up. So what do we do?

Well, we find out which one is slow and ride that. When we convert this car example to currency trading, suppose three currency pairs move in the same direction and have been moving up with a correlation over 0.60 in the long-term and we find that suddenly the correlation value for one pair against the other two has become 0.20, that may be an opportunity to buy this currency pair with the expectation that ultimately it may catch up with the other two.

You may come across various strategies for correlation trading but the best use is in managing the multi-currency pair portfolio so that we do not enter the trades which conflict each other.

You do understand how flawed you're reasoning is, correct? Just because the market appears random, does not mean it moves without reason. All I am asking, is why do you believe the market will move the way you say? The whole purpose of speculative forex trading is to find areas to trade with high probabilities of direction. What is your thought process behind the trade?

These forums exist to discuss the ideas behind price action (technical and/or fundamental analysis). I enjoy reading conflicting analyses, but "because it has to", is not really very descriptive. If you truly believe the market is random, taking a short where you to say go long has an equal chance of being correct.


Also as clarification, I do not believe there will be any greater "global crisis". But I am not arrogant enough to say it can't happen.

What I believe is the US economy will continue to bottom and slowly increase, first increasing the strength of the CAD by increasing a demand for CDN exports. In 6 months or so if we continue on this path, I think the USD could gain strength against all currencies (including CAD). A bullish reversal NOW on the USD/CAD could only happen via risk aversion IMO.

Looks like PA hit and bounced off major support at 9765
Slight sign of bullish hint.I anticipate retrace to at least 61.8fib level which point I will close all my longs with profit.

u/cad is relentless.... Pending buy lurking ~420 pips below current price. (.9729)

Longs...exert caution.

We are well established below the 2012 lows. Testing the .9500 is well within the picture now. I would expect some basing and slight retrace before continuing toward relatively strong .9690 resistance/support.

Placing more shorts as reversals/retraces are rejected below .9950.

- Enough chasing it for the downside.

Whenever I do this, it seems to jinx me but here goes, long USD/CAD aiming for bounce on weekly bearish channel.

Some movement up from 9717 lows
It seems crude reserves effected a little.
I am still heavily Long

Live oil prices
97.14 currently .13 down
Hoping more drop in oil prices

would you please explain how & why droping oil price helps usd/cad going up?
Thanks.

Simply because Canada export oil

About an hour ago, did anyone short the UTL (from last week)?

This pair never seems to know where it's going unless it's making a beeline for your stops! The little bastard is trying to pretend it's gonna turn down again at around R1 now... I doubt that. It's probably looking for some more short suckers to enter right about now.

Does not matter where it is heading as of now, everything hinges on QE3 and that is what the markets are waiting for. As soon as QE3 is announced this pair will drop like a stone and vice verca... Personally I would stay clear of long positions on this pair as I think QE is coming tomorrow.

Well, the comment was aimed at scalpers; but, on your TF I agree... I'm just totally confused about whether QE3 will actually appear. I'm not taking ANY position in any pair until the decision.

Btw: what is your reason for believing QE3 will come tomorrow?

Edit: according to latest WSJ survey of economists, QE3 won't make a bit of difference! But then, since when does BB listen to reason?

Well for a start BB did give some strong hints about QE if the economic indicators don't turn during his Jackson Hole speech. Apart from that here is the summary on the last meeting minutes:

Key points from the minutes are summarized as follows:
Many on FOMC favored easing soon if no sustained growth pickup.
Many participants saw new QE as bolstering U.S. recovery.
Discussed QE, extending 2014 forecast on rate.
Markets have large capacity to handle more QE.
Long-term inflation expectations stable. Mid-term inflation at or below 2%
target.
Participants saw economy decelerating after June meeting, and see
moderate growth in coming quarters.
Risk from Europe, U.S. fiscal policy. Some participants said U.S. recovery
vulnerable to shocks.
Manufacturing was slow or falling.

http://finance.yahoo.com/news/usdjpy...183400556.html

Will QE3 make a difference? I don't think so... But that will never stop BB from giving the market more sugar. I remember QE2 quite clearly, most retailers believed it won't happen when BB had given hints he is willing to take the step. It seems like we are in for a repeat here.