When you look at the intermarket relationship with crude oil, USD/CAD & CAD/JPY pairs you will find that the USD/CAD & CAD/JPY pairs have moved the exact same amount of pips in it's opposite direction while crude oil has been falling since NY open.
The CCI reading in the USD/CAD pair and Crude Oil are identical in it's opposite direction eg. USD/CAD is rising and Crude Oil is falling.
That indicates that there has been volume moved into the USD/CAD pair in order to hedge against a falling crude oil price which caused the USD/CAD pair to move up from it's 1.1026 - 1.1036 S&R level temporarly.
The point I am trying to bring across here is...that it is not sufficient to look at S&R levels alone. If you [wish to] trade USD/CAD you need to keep an eye on Crude Oil price action and volume movements into the USD/CAD pair.
Last edited by cas; 07-20-2009 at 12:35 PM.
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