I am attempting to upload a “Chart of the Day” 5 days a week, so let’s have a discussion.
The NASDAQ and USDCAD are divergent. As the NASDAQ rises, the USDCAD falls, and as the NASDAQ falls, the USDCAD rises. Note that the orange/red hand-drawn line is the USDCAD 4-hour chart overlain over the NASDAQ 4-hour chart.
This is a very important piece of information if you trade the USDCAD or even the AUDUSD. However, the AUDUSD is convergent with the NASDAQ. If you are looking to trade one of these two pairs, see what the NASDAQ, Dow Jones and S&P are doing, before opening the trade.
More importantly, if you are looking to trade one of the indices mentioned above, the USDCAD or AUDUSD could be a good alternative. Especially if you do not have enough leverage to trade the indices, or you don’t want to be over-leveraged in these volatile times.
I saw a similar type of drawing from Steve Vulgi (@Vulgi on twitter) on ForexAnalytix (who have daily webinars).
The indices have been very interesting in the past few weeks. My bias was that it would be impossible for a V-shape recovery, however, there is continued pressure upwards. This being said, it is difficult to go against the Fed, especially if they are pumping trillions of dollars in the economy. The NASDAQ is currently testing the 78,6% retracement. If it breaks above this level, I can definitely see it moving ever closer to the highs of Feb and even testing those highs.
