{"id":8161,"date":"2010-04-01T09:30:17","date_gmt":"2010-04-01T13:30:17","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=8161"},"modified":"2010-04-01T09:30:17","modified_gmt":"2010-04-01T13:30:17","slug":"usdcad-may-continue-downtrend","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/04\/01\/usdcad-may-continue-downtrend\/","title":{"rendered":"USD\/CAD May Continue Downtrend"},"content":{"rendered":"

By Greg Holden<\/strong> – It appears that an opportunity has presented itself on the USD\/CAD currency pair. Given that most banks are closing for the Easter holiday tomorrow, we should experience very high volatility as a result of the low liquidity which we should be seeing. This makes the power of the US Non-Farm Payroll data all the more important.<\/p>\n

Now, for some strange reason, the US is forecasting a sharp jump in employment data, despite there being little evidence of such a strong rebound. Even yesterday\u2019s ADP figures showed that the market should be preparing for a minor decline in employment, not a boost. This is the perfect recipe for a disappointment, leading to a sharp decline in the USD against every major currency pair.<\/p>\n

I\u2019ve highlighted the USD\/CAD pair because it seems to be presenting solid evidence that a major support line is going to be breached, followed by a jump beyond parity.<\/p>\n

– The chart below is the weekly USD\/CAD chart by ForexYard.<\/p>\n

– The indicator provided here is the Relative Strength Index (RSI).<\/p>\n

– What this chart shows us is 2 things:<\/p>\n

– First: the USD\/CAD is clearly in a solid downtrend. The RSI supports this and does not show that it has entered the over-sold territory yet, giving it more room to run.<\/p>\n

– Second: the pair is rapidly approaching a significant support line at parity (a 1:1 price, also known as a price of 1.0000). This means we may see some hesitation at this price, and perhaps even a rebound with a target near 1.0400, indicated on the graph below.<\/p>\n

– However, given that the US is the only Western bank open tomorrow and is due to disappoint with unrealistic expectations for the NFP, a strong USD downturn may be getting priced in today and tomorrow. This means it may be a good time to jump in on this trend.<\/p>\n

– If the pair does breach past the parity mark (1.0000), there is a solid chance that it will continue to drop in a much more rapid manner than it has over the past few months. Meaning that now may be a great entry point for a sell position on the USD\/CAD.<\/p>\n

– Traders should also manage their risk with proper Stop and Limit orders, on the other hand. As mentioned above, there is a possibility that the pair will bounce back towards 1.0400 before descending to parity so traders should be prepared for this price movement.<\/p>\n

USD\/CAD Weekly Chart<\/strong><\/p>\n

\"\"<\/a>
\n<\/strong><\/p>\n

Forex Market Analysis<\/strong><\/em> provided by\u00a0Forex Yard.<\/strong><\/a><\/p>\n

\u00a9 2006 by FxYard Ltd<\/p>\n

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Greg Holden – It appears that an opportunity has presented itself on the USD\/CAD currency pair. Given that most banks are closing for the Easter holiday tomorrow, we should experience very high volatility as a result of the low liquidity which we should be seeing. This makes the power of the US Non-Farm Payroll … <\/p>\n

Continue reading “USD\/CAD May Continue Downtrend”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-8161","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/8161","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=8161"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/8161\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=8161"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=8161"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=8161"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}