USD/CAD Forecast for the week of Nov. 7th, 2011, Technical Analysis

USD/CAD bounced this past week as traders sold off a lot of risk-related assets globally. The pair finished strongly above the parity level, and as such has us thinking long at this point. However, the 1.03 area will be resistive, and as such we are waiting for a close above it in order to buy. The selling of this pair can be done if we break the lows of this past week’s candle. Until then, we think this market goes sideways.

USD/CAD Forecast Nov. 4th, 2011, Technical Analysis

The USD/CAD pair fell on Thursday as oil managed to climb by the end of the session. The parity level still holds as support, and the market couldn’t break through. This area is where we need to see either a buy or sell signal. The Non-Farm Payroll number will certainly push this pair, and if it is a bad number, this pair will probably rise as the Canadian economy is so dependent on the US for its market. If the number is good – it will send this pair down. The parity level is crucial, and depending on which side of parity we close on – this could be you cue for the pair going forward into next week.

USD/CAD Forecast Nov. 3rd, 2011, Technical Analysis

The USD/CAD pair fell a little during the Wednesday session as the massive move got pulled back from the Tuesday rally. The parity level still serves as a pivot of sorts, and we only trade in the direction that we are from there – meaning that in this case, we like buying on signs of support or new highs. The 1.03 level will serve as resistance, but the market will certainly move on headline news, of which there will be quite a bunch of. The pair looks bullish as the breakout, pullback, and retest has signaled. However, the pair could be choppy as the price of oil can gretly effect the price of the CAD as well.

USD/CAD Forecast Nov. 2nd, 2011, Technical Analysis

The USD/CAD pair shot straight through the parity level on Tuesday as traders continued to embrace the “risk off” trade. The pair is highly sensitive to the risk parameters of global trading, and as such it will often rise in times of uncertainty. The parity level continues to use the parity level as a barometer of which direction you want to be in. At this point, it is looking more and more like we want to be long. The pair could be bought on pullback to the parity level that shows supportive candles in order to join the market. The breaking of the top of the daily candle on Tuesday has resistance just above in the 1.03 level, so we don’t think there is a ton of room to move to the upside from here without resistance coming into play. As the world continues to worry, this pair could rise. However, watch oil – if it rises, this pair will fall, and vice versa.

USD/CAD Forecast Nov. 1st, 2011, Technical Analysis

The USD/CAD pair rose on Monday as the Dollar got bought in mass by traders around the world. The “risk off” trade came back with a vengeance, and the USD/CAD rose as a result. The Canadian dollar is a “riskier currency” as it is tied to oil and with the oil markets falling – the CAD’s value fell as well. The pair is stopped just at the parity level, and this is considered to be our “line in the sand” in this pair. The daily close above this area has us long again, and the daily close below the Monday lows has us short again. Until then, we will watch the market and act accordingly.

USD/CAD Technical Analysis October 31, 2011

USD/CAD rose and retested the parity level on Friday, only to fall back down. This shows us that the breakdown in this pair was a serious one, and we think a breaking of the lows on Friday could send us into selling positions. However, with all of the “noise” in the area at these levels, we think the action could be a grind, and less of a meltdown. The overall trend is still down, so we prefer selling at this point. We wouldn’t buy unless we find a way to rise and close above parity again.

USD/CAD Technical Analysis for the Week of October 31, 2011

The USD/CAD pair smashed through the parity level this past week and into the 0.99 support level with relative ease. The preceding week’s shooting star was the hint, but the parity level was just below. Now that we are under that level, we think the easiest route is to the downside. However, we expect the down move to be a slow grind, not a fast move. We like selling rallies until we close above the parity level, but would have to do that on shorter time frames, but keeping the longer-term weekly charts in mind. A weekly close above the parity level is needed to think about longs.

USD/CAD Technical Analysis October 28, 2011

The USD/CAD sliced right through the parity level on Thursday as the EU finally came out with a bailout plan. The commodities markets took off as the US dollar was sold off against everything. The oil markets really took off, and as a result – the CAD became much desired. The closing on a daily candle well below the parity level has us thinking sell now, but it should be noted that the next 200 pips or so are likely to be a grind as there are a lot of orders in this area. We like selling rallies, at least until we close above parity on the daily chart.

USD/CAD Technical Analysis October 27, 2011

USD/CAD fell hard during the Wednesday session as the rumors flew out of Europe that some kind of deal has been reached. At the close of the US session however, there are just that – rumors. The parity level is considered to be massive support, and until it gets broken below, the pair cannot be sold as there should be a lot of buying at that level. We have been looking for a daily close below that area before we can sell, and until then – we won’t. Buying cannot be done until we see some kind of supportive candle in the parity area, perhaps a hammer or bullish engulfing one.

Next USD CAD Move Hinges on Euro Zone Announcement

Daily USD CAD Pattern, Price & Time Analysis

A surprise announcement by the Bank of Canada on Tuesday helped put in a bottom in the USD CAD at .9990. The subsequent rally formed a daily closing price reversal bottom. A follow-through move through the previous day’s high at 1.0212 is needed today to confirm the reversal.

Once confirmed, the closing price reversal typically leads to a 2 to 3 day rally equal to at least 50% of the previous down move. Based on the short-term range of 1.0657 to .9990, this new upside target is 1.0324. Down trending Gann angle resistance is at 1.0337 today, making 1.0324 to 1.0337 a key resistance cluster.

Traders should also note that in order to reach the forecast target, the Dollar/CAD must cross a swing top at 1.0263. A move through this price will turn the main trend to up. Buying prematurely before the reversal bottom is confirmed could prove to be a risky trade since this is a momentum pattern. This means that the breakout through 1.0212 must be accompanied by fresh buying and short-covering.

Intraday traders should watch for a possible break back to 1.0101 to 1.0075. If support is established in this zone then look for traders to take another shot at breaking out to the upside. In order for this move to re-establish itself today, the USD CAD must get help from the activity in the Euro Zone.

Although the Bank of Canada left interest rates unchanged at 1.0%, this wasn’t enough to stabilize the Canadian Dollar since it also removed a reference to withdrawing stimulus from its economic growth outlook. This served as an indication that the central bank was picking up a signal of a weakening global economy. In its monetary policy statement the BoC acknowledged that its decision was based on the possibility that the situation in the Euro Zone would lead to a “brief” European recession and slow U.S. economic growth. For a country that relies on exports, the news that the central bank was looking for less demand from the U.S. surprised traders.

Everything else aside, the Bank of Canada was basically saying that it expects a short recession in Europeand a slow down in growth in the U.S. Calling out both major economies was a bold move by the central bank. There was no mention of China, but one has to believe that if the economies in Europe and the U.S. both turn down then China is sure to follow.

The announcement by the BoC was clearly precautionary. Citing potential weakness in Europe and the U.S. served as a notice to investors that it was not willing to take the chance that a solution to the Euro Zone debt crisis would lead to a quick turnaround in the global economy. Identifying slower growth means it can maintain the stimulus that has helped prop up its economy. The market reacted as if traders were anticipating more positive news, but the comment by the BoC was not ambiguous and traders reacted by selling off the Canadian Dollar.

With the USD CAD trading steady-to-lower this morning, it looks as if traders are giving the Euro Zone finance ministers the benefit of the doubt. If the EU plan disappoints traders then look for this currency pair to surge to the upside. If the plan calls for more funding than the currently anticipated Euro 1 trillion ($1.39 trillion) then sentiment could shift to risk on and the Dollar/CAD will erase much of Tuesday’s gains.

USD/CAD Technical Analysis October 26, 2011

The USD/CAD pair bounced hard from the parity level on Tuesday, an area that we have mentioned several times over the last week or two. The area offered support, and was urged on by the Bank of Canada not only holding rates on Tuesday, but also being very dovish on the future of the Canadian economy due to the global uncertainty in the various markets. With this in mind, it appears that we could see a bounce in this pair. Also, if the EU doesn’t come together with a reasonable solution to the crisis over there, the “risk off” trade could come back into play – forcing this pair higher as well.

USD/CAD Technical Analysis October 25, 2011

USD/CAD fell on Monday as traders sold the Dollar around the world. The oil markets also managed to break above the $90 mark, and this was massive resistance. The demand for oil could and should push the value of the Canadian dollar up, which of course pushes this pair down. However, the parity level has held for the session, and the level is massive support. Until we close below that on a daily candle, it is going to be very difficult to short this pair. Signs of support and a move upwards from current levels could send this pair go up to 1.03 in short order. In the meantime, we need to see what markets due for the Tuesday and perhaps Wednesday session, and then place our trade accordingly.

USD/CAD Technical Analysis October 24, 2011

USD/CAD fell on Friday and tested the parity support level in the process. The daily close is looking weak, but the level has held up. The market will be highly correlated to the oil markets, and they look ripe for a pullback. Because of this, we suspect a bounce is coming in this pair. The selling of it will be very difficult unless we manage to break below parity, and hold that to a daily close. The market should be observed for the Monday close, and not traded until we see the market’s position at that point.

USD/CAD Technical Analysis for the Week of October 24, 2011

USD/CAD fell on the week, but remains above the parity level that we have marked as massive support. The market continues to be held hostage by the oil markets, and those looks like they could be ready for a pullback. The bounce at a parity level in this pair isn’t a big surprise, and would continue to show how important the “1” level is in all pairs. The pair had a massive explosion to the upside, so this pullback isn’t unwarranted. The candle for the week does look bearish at this point, but if there are any negative headlines out there – this pair will rise as well. At this point, we think a bounce should be coming, and would look for a buy signal on the daily chart.

USD/CAD Technical Analysis October 21, 2011

The USD/CAD pair had a back and forth session on Thursday as traders first sold off risk, only to buy it back in the later hours of the session. This has been a bit of a trend lately: Americans trying to reverse the bearishness out of Europe. The pair will be greatly influenced by oil, and the massive support expected at the parity level. Because of this, we are hesitant to sell it until we close below that parity level. We are looking to see if it holds as support, and would be willing to buy a bullish candle form that area, as the headline risks out there are great, and the Dollar is always king in uncertainty.

USD/CAD Technical Analysis October 20, 2011

The USD/CAD continued to respect the parity support area on Wednesday, as not only the demand for “riskier” currencies fell, but the demand for oil did as well. This was a double-whammy for the Canadian currency, and it showed in this market. The resulting candle is a hammer, and it looks like the market is ready to jump back up on any signs of bad news. If the oil markets move to the downside from here, we expect this up move to continue. Watch oil for the bias, and then trade the Canadian dollar accordingly.

USD/CAD Technical Analysis October 19, 2011

The USD/CAD pair fell during the Tuesday session, and continues to react inversely to the oil markets. The parity level below still keeps this market afloat though, and until we get a close below it on the daily, we are not selling this pair. The 1.0650 level above is massive resistance, but it is far enough that we are interested in buying on a sign of supportive price action, perhaps in the form of a hammer or engulfing green candle.

USD/CAD Technical Analysis October 18, 2011

The USD/CAD bounced on Monday as the trading world started to shun risk assets globally. The oil markets were soft, and so were the equity markets. This sends risk assets down, and in this case – the Canadian dollar.

We mentioned the parity to parity +50 level as a question to be answered. It was the site of a major breakout recently, but hadn’t been retested yet. It has as of Monday, and it shows to be supportive. Because of this, we feel the next leg in this pair is up. As long as parity holds up in this pair – we are willing to buy dips as the global outlook is still very shaking in general.

USD/CAD Technical Analysis October 17, 2011

The USD/CAD continued to fall during the Friday session, and now looks set to retest the parity level. The level is massive support, and far too close for comfort to sell at this level, so unless you are already short – it isn’t advised to be so at this point.

The parity level should offer support, and could produce a long position if we get the correct supportive candle. If we can close below the parity level – this pair continues the long down slide that we have seen over the last several years. The pair is in a downtrend, so this wouldn’t be a massive surprise. However, with headline risks out there, it wouldn’t be a stretch to see this pair raise again either. This pair should continue to be very volatile in the near-term, so tight stops are recommended.

USD/CAD Technical Analysis for the Week of October 17, 2011

The USD/CAD continued to fall this past week, and decidedly so. The pair looks massively bearish, but the parity level is sitting just below the present level. With this in mind, we cannot sell until we get a close below it. The recent action has been a massively bullish break out, followed by a massively bearish break down. This market is extremely volatile at this moment, and is hard to trade for longer-term traders. With this in mind, we want to see what the next weekly candle looks like, and if it reacts to the parity level in a supportive or weak way. Until then, we are sitting on our hands.