Monday, February 25, 2008

Canadian Dollar Trade Setting Up

Well, I've been patiently waiting for a trade in the Canadian Dollar and I think I see one setting up.

Above is a weekly chart of the Canadian Dollar. If you look closely at the chart you will notice a very dominant cycle that runs through this particular currency. Approximately every 10 or 11 months a significant low or buying opportunity takes place. In the above chart I marked this cycle with arrows which are about 10 to 11 months apart. This cycle has been accurate and worked very well about a year ago when I actually got long this currency and caught a very large move up. Some of you may remember that trade as I wrote about it on this blog well in advance before the big upmove took place.

If we look at the daily chart below, you will notice that there is divergence in the MACD. You'll also notice a 1-2-3 formation taking place. If the Canadian dollar trades above point 2, I will get long and place a protective stop below point 3.

As always there are no guarantees in trading and protective stops should always be used. I'd like to also stress that this is not a recommendation to buy the Canadian Dollar. All I'm doing here is sharing with you what my thoughts are for this market and maybe you might find the above analysis to be of value.


Rajaram Pai said...


Kevin said...

Yes, I'm long


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