I see higher prices in store for the USD/CAD

Forexmentor.com Forex Trading Price Action

Some of you may be wondering what to do with the USD/CAD pair, now that we have had a bit of a tumble in price. The thing to look out for here is where price is in relation to previous lows. The most recent low on the 4 hour chart is still higher than the previous low, and that is what you should focus on. If that low holds, then the uptrend will remain intact. If not, then obviously a short-term reversal will kick in.

Overall, I am not in the least concerned about the USD/CAD pair. I still see higher prices in store. Oil is having a hard time breaking the 60-dollar resistance level, and the most recent futures chart for the Canadian dollar still shows the loonie in free-fall mode. On other fronts, I see the Aussie, euro and New Zealand kiwi as having topped out. We’ll revisit all of these currency pairs next week, as well as having a look at other pairs.

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Commentary on the USD/CAD

Forexmentor.com Forex Trading Price Action

I hate to dwell on the Canadian dollar (USD/CAD pair), but dwell I must. On Tuesday, I suggested you get into this currency regardless of whether or not we got the downtrend continuation pattern or not. The pattern did not unfold but, regardless, had you taken my advice, you’d be wearing a smile on your face today. This pair is on fire, and shows no signs of retreating any time soon. If anything, I see much higher prices.

It’s not often that you get such performance. The loonie is performing brilliantly – and making LOTS of money for me personally. I am NOT in a hurry to collapse my position(s) any time soon. Buy any and all weakness in an uptrend folks!!! Even if you’ve been sitting on the sidelines dreaming and wondering why, get off the couch and grab a position or two. It’s not too late, believe me. Today, price continued its advance, all the way up to M4 – the expected high on this M2/M4 day. Any hesitation at this level is just temporary.

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The NZD/USD is setting up for a good short opportunity

Forexmentor.com Forex Trading Price Action

Let’s revisit the New Zealand Kiwi. The weekly and daily charts are clearly showing a downtrending market – MACD having turned negative in both cases. The EMAs (50x100x200) are also signaling price weakness – back-to-back death crosses on the 4 and 1 hour charts.

Today, price rose well into the sell area above the central pivot point, following positive divergence MACD-to-price late yesterday evening. In essence, price is going the wrong way, and setting up for a good short opportunity.

This is the advantage of looking at the charts top-down. First, you figure out the overall trend on the higher-level charts, and then you look for counter-trend movements on the lower-level charts. There’s nothing wrong with trading the counter-trend moves, but you must be ever vigilant to catch the reversal in sync with the overall trend.

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Commentary on the USD/CAD

Forexmentor.com Forex Trading Price Action

We could very easily be in a downtrend continuation pattern on the 15 minute chart for the USD/CAD pair (Canadian dollar). Price is going through a price equilibrium (or consolidation) phase, wherein MACD has neutralized back up to the waterline, following a swoon in price. This is not all that bad. Actually, it’s a good thing, in that the overall trend on the higher-level charts is up, and any price weakness should be viewed as a great opportunity to buy this pair.

In the futures market, the loonie is in a steep slide, with no turnaround in site. Buyers, who bought previously, are selling the rallies just to get out. This is further fuelling the decline. It’s sort of like a self-perpetuating prophecy. It’s going to be difficult for this currency to reverse its course any time soon.

As a matter of fact, the currency is not even paying any attention to oil prices anymore. There is a flight from this currency, and prices could go much lower. Didn’t I say this last September? That’s exactly when I jumped on board this speeding train to nowhere.

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