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Archive for the ‘forex’ Category

The following is the daily chart for the USD/CAD and my fuzzy logic system gave me a sell signal on it two days ago. Following my system rules, after a long rise like this I wait for the "second" buy signal to enter short.

Let’s look at the EUR/USD. The second sell signal on the Euro worked like a charm…

Today I decided to do a quick analysis on some Daily charts of the EUR/USD and USD/CAD. I know my friend Luiz is very much interested in these bad boys these days… they are nice and can move quite fast. I have traded forex in the past and after a great extent of research I found that the 21/34 ema cross over works quite well to track long trends. Please note that the 21 and 34 are also Fib numbers. The second tool I use a lot not just for Forex but also for stocks are channels, they are simple and effective. Here’s a recent example of a trade where I exited because it touched the upper channel. Now, enough talk, let’s look at some pairs - comments on the chart:

Euro/Usd - Daily Chart - please click on the chart to see original image

Usd/Cad - Daily Chart - please click on the chart to see original image

Excellent example here on the use of channels…

Thoughts?

Canadian dollar hits the US$ 1.10 record today, the highest level since 1960. Where is it going? I read this excellent article by David Berman on the FinancialPost.com site. Here are some excerpts of it but you can read the full article here.

David Berman, Financial Post
Published: Tuesday, October 30, 2007

• If you want to know where the Canadian dollar is headed relative to other currencies, look at the strength of commodities. And if you want to know where commodity prices are headed, look at the strength of the global economy.
• The problem with this pattern? Increasingly, investors are resting on the unproven theory that global economic growth can continue to chug along at a nice clip without the help of the United States — a US$13-trillion economy that represents about a third of the world’s gross domestic product but is looking vulnerable to a dramatic slowdown.
• So far this year, the loonie has risen about 24% against the U.S.
• If the U.S. economy slips into recession– a very real possibility given the terrible state of the housing market there and its likely impact on consumer spending — investors are betting that strong growth in places like China, India and Europe will pick up the slack. But this remains to be seen, since the global economy in past business cycles has relied upon the United States as its primary driver.
• Even against other strong currencies, including the euro, the British pound and the Australian dollar, the loonie is outperforming.
• Chinese authorities are raising interest rates in an effort to slow down an overheating economy that relies heavily on U.S. consumption. Despite strong growth in China’s own consumer spending, exports remain a key element of the country’s economic growth. Should that growth dip sharply from its current pace of 11%, investors could become alarmed that the global economy is not as impervious to a U.S. slowdown as they had originally believed. And if that happened, the speculative veneer that is attached to commodity prices could peel off, leaving the Canadian dollar vulnerable to a pullback. “The Canadian dollar is at risk of correcting, especially if oil prices retreat,” said BCA Research in a note to clients.

As always, couldn’t finish this post without a chart. Here’s the CAD/USD chart from 2001 till present.