[iwshares]

Hi guys. I've been doing a lot of analysis recently and have some thoughts about the USD/CAD I'd like to share.

We've been in a down trend for some time. 18-28/3/11 a resistance of 0.98508 was tested but not breached. Next resistance at 0.96709 was tested with a pin reversal/blowout on 18/4/11 with the next daily bar high at the resistance level. Is 21/4/11 low, a pin bar, indicating a reversal to possibly 0.96709, or just a temporary pull back? The lower lows and lower highs of the last few days would suggest we are still in a down trend.

With my 10:1 margin I would sell 1 lot at 0.95454 (i.e. once we breach the lowest low of recent times) with a stop loss at 0.9818, profit at 0.8361. Only problem is that is below the lowest low ever. Instead sell 2 lots at 0.95454, stop loss at 0.9636 which is a still a recent support and profit at 0.8908 which is more realistic but still an all time low.

What do you think? Can USD/CAD break that 5 year low?

[Tams]

Originally Posted by iwshares »

Hi guys. I've been doing a lot of analysis recently and have some thoughts about the USD/CAD I'd like to share.

We've been in a down trend for some time. 18-28/3/11 a resistance of 0.98508 was tested but not breached. Next resistance at 0.96709 was tested with a pin reversal/blowout on 18/4/11 with the next daily bar high at the resistance level. Is 21/4/11 low, a pin bar, indicating a reversal to possibly 0.96709, or just a temporary pull back? The lower lows and lower highs of the last few days would suggest we are still in a down trend.

With my 10:1 margin I would sell 1 lot at 0.95454 (i.e. once we breach the lowest low of recent times) with a stop loss at 0.9818, profit at 0.8361. Only problem is that is below the lowest low ever. Instead sell 2 lots at 0.95454, stop loss at 0.9636 which is a still a recent support and profit at 0.8908 which is more realistic but still an all time low.

What do you think? Can USD/CAD break that 5 year low?

do you have a chart? with notes?

[TheNegotiator]

A trend is a trend is a trend and they say that a trend is your friend. However, I am not a breakout trader and if it were me, I would look to see what the action is like on any pullback. (btw, I am also not a forex trader)

[iwshares]

Hi Tams here's my chart. If you want me to add any more notes etc let me know

[BlowFish]

Originally Posted by iwshares »

What do you think? Can USD/CAD break that 5 year low?

Personally I would not concern myself with that too much and take profits ahead of it. If I had to bet on it though I would assume that it is still support (until it actually breaks).

Several currencies are at or coming up to interesting levels.

[SIUYA]

we were discussing a similar thing in the office today.
A large number of equity brokers were busy pushing the idea that the AUD is overbought - I wonder if they actually think that the USD is oversold - as thats one of the reasons for the recent rapid rise. This whole idea of a a parabolic move seems to be becoming more prelevant - I am sure its much the same for the CAD.... highs and lows are there to be broken

[MadMarketScientist]

yes the I believe it will break the 5 year low ... the fundamentals tell us so (US printing money, oilsands in Canada, etc)

and from your chart ... the technicals also support it

MMS

[Mysticforex]

I like the setup, and the reasoning makes sense. Here is my 2 Pips.

With your entry and TP you have nice R/R. My only change would be:
I have always attached significance to ROUND numbers, so, I would wait for a breach of 9500, short on a bounce, and target just above 9000.
Going short also carries a slightly positive Roll.