One other pair that has caught our eye is the USDCAD which has just broken the 2007 low and registered a new low a horse hair shy of the 1.03 handle. Now here is an interesting question for you:
How many people have made a ton of money buying the USDCAD in the last year? Not many and it still as a trading method seems like an ill advised one. Consider the fact that we are in a 3 year downtrend that has been relentless with, no reversal pattern playing itself out, and the only glimmer of hope this year abated after a summer consolidation resulted in new low being registered.
A closer look at the daily charts also shows there being more red candles than blue ones with the red ones being generally large and strong in nature. Further consider we have some nice-sized winds called a hurricane off the Gulf coast threatening potential refineries in conjunction with oil at $80 a barrel.
That being said, it seems extremely risky to be looking for longs on the USDCAD and more prudent looking for shorts. Why get in the way of a three year downtrend?
Looking at the chart below, on a shorter time frame, for those interested in getting frisky with this pair and being out the door within a day or so, you can see a couple of entry points by the two flags that played themselves out, or towards the first fib which was a major S/R level.
If you head towards the dailies, then just below 1.0500 seems like a strong place to sell since it was a 6 week support level for the last half of the summer.
All in all, if you were to see the order books on the USDCAD, you’d have to ask yourself ahead of time where the chips fell and did the winners take the chips home by buying or selling this pair? Not too hard to figure this one out.
-possible long on EURGBP since UK mortgage company news
-watch for JPY pairs as risk aversion could bang these pairs around (suggestion is to have tight stops)
-NZDUSD working within a clear range between .7060 and .7160
Happy Hunting and enjoy the weekend
Second Skies LLC