At the end of last month, I called for a substantial upcoming weakness in crude oil as the market could have finished the long-lasting consolidation after the earlier crash from 100+ levels. Indeed, oil lost almost $4 from that time and now is rebounding as markets naturally move in zigzags.
Oil-related currencies also suffer, and in this post, I would like to share with you an exciting chart setup with tremendous profit potential for one of such currency, the Canadian Dollar (CAD) also known as “Loonie” among traders.
Before that, I built a chart to demonstrate the correlation between WTI crude oil and the Canadian Dollar.
Chart 1. WTI futures Vs. Canadian dollar futures: Perfect Correlation
Chart courtesy of tradingview.com
In the chart above the WTI futures graph is black on the right scale and the Canadian Dollar futures graph (in US$ per 1 CAD) is red on the left scale. I didn’t add any annotations on the chart as you can clearly see that the correlation is just perfect and the most important fact is that the crucial market phases like strong moves and consolidations coincide in time. The Canadian Dollar tends to overshoot WTI amid market strength, but it is quite moderate during market weakness. Continue reading "Does Oil Hold The Key To The Canadian Dollar"→
The sudden hype around Forex trading is not without good reason. Forex, which is the exchange of currency on the open market, provides a number of benefits that you won’t get from the stock market or other trading venues. Forex is fast, it’s fun and it has the potential to lead to big profits.
The Size of the Market
There is close to 2 trillion dollars being traded on the Forex market every single day. You don’t have that kind of liquidity in any of the other markets. With that much money floating around, there is no worrying about prices changing too much before you are able to enter or exit your trade.
With a market that is this large, it is also nearly impossible for prices to be manipulated by any one single group. This allows for a more accurate read of supply and demand as you analyze the market and your currency pairs.
In light of the news from the land of the rising sun and the sinking currency, let’s reserve NFTRH 315’s only real charting for a big picture monthly view of currencies, to which we usually give just a brief update, and then some misc. big picture monthly charts [not included in this excerpt] as we try to gain perspective on things that may seem illogical to our rational minds.
Yen is losing the next level of support. BoJ saw that support too. I’ll bet they also took note of the big October bounce and found it unacceptable.
The Gold Report: James, from your perspective in Europe, is the region in as bad a financial crisis as it appears in the headlines here in the U.S.?
James Turk: Yes, it really is. However, Europe is a big place, and you have to look at the individual countries one by one to understand the situation. Generally speaking, the Mediterranean countries are in the worst shape. Germany has been in the best shape, although recent economic data indicate it may be falling into a recession again. France is not quite as bad as the Mediterranean countries, but in economic activity, it is worse off than Germany and the rest of Northern Europe.
The September Dollar was lower due to profit taking in overnight trading as it consolidates some of last week's rally. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If September extends the rally off June's low, June's high crossing at 84.00 is the next upside target. Closes below the 20-day moving average crossing at 82.49 would temper the near-term friendly outlook. First resistance is Tuesday's high crossing at 83.65. Second resistance is June's high crossing at 84.00. First support is the 20-day moving average crossing at 82.49. Second support is the reaction low crossing at 81.56. Continue reading "Currency Commentary for Wednesday"→