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Rezz
(Vancouver, Canada)
8 Posts by Anonymous "rezz":
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Rezz
Vancouver, Canada
Posts: 53
13 years ago
Feb 2, 2011 1:40
In Thread: Commodity FX (CAD AUD NZD NOK)
Now its the inflation story that is dragging down the USD index. Last time i recall, when latin american countries ran into inflation their currencies devalued and the governments had to raise rates both to control inflation, and to give a reason for foreigners to take on the risk and park their money in a currency that may be going downhill.

So what gives? It seems the USD can do no right. If US numbers/growth are better than europe with lower inflation, the reason to rally is because they say risk is back on.
Well if inflation goes up, costs will trickle into reducing corporate margins (if they avoid passing it to US consumers), and the S&P should be peaking then? All indications are this is a classic suckers rally during earnings season, where wall street sells into the strength which is brought about by investors who are buying the hype. I expect a correction, perhaps even tomorrow!!
Rezz
Vancouver, Canada
Posts: 53
13 years ago
Jan 13, 2011 4:15
In Thread: Commodity FX (CAD AUD NZD NOK)
CAD looks like a dead fish, very little movement. It certainly resembles AUD/USD when it was peaking around 1.018 ish before the stops got run up to around 1.0260 and the crash afterwards. I smell the pros wanting the big dip in usd/cad for the amateurs to give up their hand again. Heard TD FX strategist talk on BNN today, he expects CAD to be in similar trading range as last year.

forextrader... i have to disagree on speculating 0.90 as a possibility for usdcad. If oil was at $200 maybe! In canada we have the luxury of having physical proximity to the US, so when CAD strengthens Canadians will slow down purchases in canada and buy from the US. It probably has a delayed effect on sales, which eventually lead to bad canadian retail numbers as chloe is also aware of. I guess my point is technicals are one thing, but you cant rely on it always. Remember you mentioning that you think AUDUSD wont see parity again for a long long time when AUDUSD was at 1.0150 ish. The last week proved otherwise for aussie.
Rezz
Vancouver, Canada
Posts: 53
13 years ago
Jan 11, 2011 10:06
In Thread: Commodity FX (CAD AUD NZD NOK)
Sydney, my tp is open for now, but likely I will wait for 1.0250 ish.. Given the negative technicals for USDCAD, this is not a pair to trade long with much leverage at the moment or for short term gains. Some banks (RBC) even forecast seeing USDCAD at 0.97 during Q2, 2011, so I am prepared for the swings.
Rezz
Vancouver, Canada
Posts: 53
13 years ago
Jan 11, 2011 9:16
In Thread: Commodity FX (CAD AUD NZD NOK)
For USDCAD traders, I usually check out commentary by Shane Osborne, FX strategist at TD Securities.. https://www.tdsresearch.com/currency-rates/research.home.action

He says corporates doing USD buying around 0.99. Probably speculators are active selling USDCAD, but i have a feeling they will get squeezed after the Canadian housing starts number at 13:15 gmt.
I'm buying USDCAD at 0.9925.
Rezz
Vancouver, Canada
Posts: 53
13 years ago
Dec 30, 2010 19:25
In Thread: Commodity FX (CAD AUD NZD NOK)
chloe, i have a feeling that usdcad is going to get stronger before it weakens. Technicals point to cad strengthening a few % above parity before reversal. I also look at what is going on with AUDCAD as well to judge if people are buying/selling aussie, or buying/selling cad. seems AUD was being sold off when it hit 1.02 against the USD, but not cad, so this is a bad sign if you want to go long with USD/CAD at parity again.
Rezz
Vancouver, Canada
Posts: 53
13 years ago
Dec 30, 2010 4:19
In Thread: Commodity FX (CAD AUD NZD NOK)
I look forward to see what will happen into next week, and see if the Aussie continues the uptrend in a more normal liquidity environment. I agree with chloe that we will likely see a small pullback by friday but not enough so that the year closes near the highs. Probably in January we may see another attempt at the highs or not, and it doesnt have to correlate with equities going lower first. Many times currencies move before the equity markets open the next day on the down side in NY. Also from what i see from the future contracts positions, the Aussie is extremely crowded on the long side contracts, and this always means its risky to go into long positions at these levels. Professionals are always patient and will wait for a pullback into a support level before re-entering, something to keep in mind. So I still think all this up move is still stop loss covering.

Below is a report by the Royal Bank of Canada which has AUDUSD seeing even 0.92 sometime during 2011. I am curious is anyone has forecast links from other sources for the major pairs?
http://www.rbc.com/economics/market/pdf/fmm.pdf
Rezz
Vancouver, Canada
Posts: 53
13 years ago
Dec 23, 2010 20:21
In Thread: What's Next for Aussie?
looking at the last 3-4 days in the AUD/USD I wouldnt take a close above parity today as confirmation of the upmove, because of low volume. My take is support is mainly coming from faster drops in EUR/AUD than EUR/USD which means stop losses triggering in long EUR/AUD, plus those in AUD/USD are what is keeping AUD/USD floating higher SLOWLY. If anything my cynic view is that the big traders are looking for such an event to happen, so that people who were short earlier/or on low margins give up their hands, plus this false confirmation leads to many "new entrants" who may be falsely looking for the move higher. These new amateur buyers are what the big guys are waiting for, so they unload their long positions or else to take enough new short positions while the amateur buying is heavy, before they let it drop. Thats the cynical view, and we'll see how it plays out.
Rezz
Vancouver, Canada
Posts: 53
14 years ago
Mar 18, 2010 9:01
In Thread: Commodity FX (CAD AUD NZD NOK)
USDCAD goes from 1.0070 to 1.0135 1-Hr resistance, and now back to 1.01 area. Seems like the downward pressure and stops were blown during the move to 1.0070 yesterday, so most likely short squeezing back up to 1.0165 if equities & oil fall today.
Rezz
Vancouver, Canada
Posts: 53
14 years ago
Mar 11, 2010 21:24
In Thread: Commodity FX (CAD AUD NZD NOK)
Looks like the big players are desperately trying to "shape" the daily close candles on some currency pairs, and also the S&P by forcing weak squeezes. Watch how USDCAD came roaring back down to close where it did.. also Oil, with little news yet.
I cant imagine the smart money is buying risk right now. Ashraf hope you are right and the top gets blown on this silly rise in equities with China raising rates tomorrow.
Rezz
Vancouver, Canada
Posts: 53
14 years ago
Mar 10, 2010 23:25
In Thread: EUR
Ashraf,
I'm a recent finance MBA (univ of toronto) and still figuring out the forex markets. Your book is a great read. I have a question about how one deciphers cross pairs like EURCAD or GBPAUD. It seems these pairs dont "respect" supports and fib-levels (low liquidity?), but the market just uses them to add "extra fire" to moves, say lower in USDCAD or higher in AUDUSD, by squeezing the EURCAD or GBPAUD longs out further and further.
my question is how can one even be comfortable in the technicals of these (non JPY) cross pairs when they dont quite account for much? or do they?
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