Canadian dollar downtrend any time

It’s time for me to continue updating the blog on important Forex releases. This week hasn’t been very rich in fundamental events and we haven’t seen much action yet. Yesterday’s FED minutes failed to create volatility and market participants will probably trade with the bias that they have rather than information that they got from fundamental news. I am looking at various Canadian dollar pairs now and I see that ‘the loonie’ has a huge potential to fall long term. Weekly charts clearly show that there is a big probability of breakouts in various CAD pairs and this is not good news for the currency.

We have CPI from Canada this Friday and it could be a real catalyst for sharp move of prices. It is always very difficult to say when will the break occur, but in my opinion the phrase ‘sooner rather than later’ fits very well in this case. British Pound Canadian dollar pair was able to break about 200 sma on a weekly chart. After being for a very long time in a downtrend the pair went above the average this June, then broke down, but for the last three weeks it regained the lost ground and is above it again. The pair is playing with 1.6400 level which is the breakout point and I intend go long if the pair goes above it next time. The same can be said about other CAD pairs. Be aware of that. There might be some rest and consolidation happening right now, but as I said, I think the time of the breakout is near. Let us wait for tomorrow.

I also suggest you reading my previous post: http://forex-news-trading.blogspot.com/2013/08/ultimate-guide-to-successful-day-trading.html

Canadian dollar holds ahead of CPI

No major news remains for the remaining of the week. Yes, Ben Bernanke is going to present his semiannual financial policy to the Senate today, but he did this in front of the House yesterday, so I do not expect anything drastic to happen. Traders might send the greenback lower just to make extra profits for the end of the week and let gbp/usd reach 1.5300 and eur/usd 1.3300 levels, but that is not for sure. The nearest resistance for eur/usd is 1.3130 and for gbp/usd 1.5250. Intermediate trend for European currencies remains upwards and for US dollar downwards. 

One event that is of interest for currency traders should be Canadian Consumer Price Index coming tomorrow at 12:30 GMT. You never know which direction will ‘the loonie’ go, but there is a clear technical bearish bias for the currency. Although fundamental expectations are bullish and traders might position for such news tomorrow you should always remember the axiom ‘buy the rumor and sell the fact’. In my opinion current expectations of economists are too optimistic and Canadian dollar might fall if those expectations are not fulfilled. In the meantime (today and till the release) Canadian dollar will probably rise moderately. Get ready for this risk event.

Friday fx news: job data

Friday has come and it promises to be very wild indeed. We have Non Farm payrolls and unemployment rate from United States at 12:30 GMT, as well as net change in employment and unemployment rate from Canada at exactly the same time. This data usually creates very volatile moves in the markets. I expect today will not be an exception to the rule. I hope you saw what happened yesterday when both UK and ECB released interest rate decisions with the comments that followed. Traders lost their heads by trying to short British Pound and Euro. Swiss Franc collapsed like a rock into the water. Remember most European currencies usually move in unison. Franc seems to be the weakest ‘guy’. 

What about other currencies. I assume that US dollar and Canadian dollar will move in unison today too. That’s what usually happens. Either both fall on the news or they both rise. Have this in mind when you place your trades. Gold in most cases falls when Non Farm payrolls comes out. I do not know why, but that is my experience. So, choose appropriate level to enter a short order in gold and if market goes down, so will you. Do not forget to set your stop and take profit orders though. So, a few hours left till the news. Let’s see what happens.

News from Canada can cause loonie to collapse

Hi, folks. We are having quite a lot of important releases this week. Today is very significant, because Bank of Canada will announce its' interest rate decision. As you may see most of Canadian dollar pairs have been in pretty ugly ranges. Some tried to make new highs: such as usd/cad and gbp/cad, but failed. I guess today will be the day  when the loonie will collapse. Of course, this is just my speculation, but do not forget that interest rate decisions are the most important fundamental events in Forex market. So, be sure to watch what happens at 14.00 GMT today.

I am also expecting Euro to go down against US dollar and finally breach 1.2800 level and then go to last year low of around 1.2000. It may take some time. Friday may be key for Euro as we have Euro zone consumer price index coming out. That should send eur/usd and eur/gbp to their lows. I am already short eur/gbp and if Friday sees a breakout lower I will add to my position in the pair and likewise in Euro dollar short. Ok, enough for today. Hope to update my blog soon.