USD/CAD - Hits 61.8% Retracement

USD/CAD - 61.8% Retracement Hit

Just a quick update, the USD/CAD hit the 61.8% retracement after the USD overnight rally. A lot of data out this week so I'll be keeping an eye on more opportunities.

USD/CAD - Makes Gains, Hits 38.2% Fib

USD/CAD - Triangle Breaks - Higher

USD/CAD - Holding at 38.2% Fibonocci Retracement

The USD/CAD was able to break out of the triangle and closed just under the 38.2% Fib retracement - the move lower after Fed announced a $300 billion treasury purchase plan on March 17th (1.2750 high) to the low set a day later of 1.2190. A double bottom was set on the 23rd of March, which followed by a period of consolidation and a triangle pattern trapping the pair until Friday's European session. I'm looking to reset a long position in the 1.2330s for a move to the 50% retracement. I am very hesitant in doing much since the market is headline driven, with Quantitative Easing in focus, if Canada follows in US' footsteps, then I surely believe we'll see another run towards 1.30, at which point I'd like to think we'll break further above that top. See charts above for support.

Commentary By Peter Wadkins of ThomsonReuters/DailyFXPlus

DailyFX - Plus: 16:12 EUR/USD: Bad Omen For Bull Trend New York, March 27th.

As we have noted many times in this column, a strong trend should open the week and close the week in the direction of the trend, the middle should be backing and filling. Today's EUR/USD collapse belies that, and even with the cycle gurus looking for a currency top in 'the next few days' there is a distinct feeling to this market that their initial call for a March 23rd week peak was the prescient one. The cycle gurus tell us another EUR/USD bounce is on the way, the week of April 20th (originally Easter week, April 13th) and then a pronounced strong USD uptrend.

They also cautioned 'supports at 1.3300 (EUR/USD), 1.1400 (USD/CHF) and 1.4200 (GBP/USD) must hold on a closing basis if our positive outlook is correct. If these levels give way then these currencies are headed directly lower into July'. EUR/USD is at 1.3295/00, USD/CHF 1.1440, and GBP/USD 1.4300 (by virtue of a drop in EUR/GBP).

The key phrase there is 'on a closing basis', if supports hold and can close above there, we may yet see the bounce they look for, and considering we hit 1.3262 at the low, we have cleared out most of the stops. Our 1.38% Fibo target of 1.3420/1.3736 was 1.3300, and here we are, hmmm.

- Peter.Wadkins@ThomsonReuters.com

USD/CAD Breakout Opportunity

USD/CAD - Breakout Opportunity

Based on the 1 hour chart above, I'm watching the USD/CAD for a possible breakout to the topside. The CAD has been stuck in a range for several days now and looks prime for a move. Current floor is at 1.2190 and resistance is at 1.2350. Next couple of hours are important as it will lead me to believe in a USD rally. More to follow.

Euro Update

Two weeks ago, when EUR/USD was trading in the 1.25s, I wrote that I thought the pair may have a chance to reach 1.32s. Unfortunately, my analysis never materialized in the blog and I wasn't able to document my reasons. Today, following the FOMC meeting and comments, the pair blew through that level and nearly hit 1.3500, pausing 3 pips below, still trying to find a good place to settle as I write this. The FOMC meeting comments pionted towards a more aggresive quanititave easing policy than the market expected, allowing more bad debt to be purchased.

"The Committee decided today to increase the size of the Federal Reserve's balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total purchases of these securities to up to $1.25 trillion this year, and to increase its purchases of agency debt this year by up to $100 billion to a total of up to $200 billion. Moreover, to help improve conditions in private credit markets, the Committee decided to purchase up to $300 billion of longer-term Treasury securities over the next six months".

We'll see if this works. In the meantime, let the algos do their work while we, humans, attempt to figure out where the rate may be tomorrow.

USD/JPY - Target Approaching

USD/JPY - Target of 100JPY Approaching

Good morning. First of all, I apologize for not writing more of an analysis for my target of 100JPY on USD/JPY trade I posted early December. The market is now approaching 100JPY, which also represents the 200 day MA. The current price also represents the 50% retracement level from August 110.70 to December and January low of 87.21 (which double bottomed).

The Yen pairs are no longer following equity prices as a norm. Interesting to see what the next trend will be. Next analysis will be the EUR/USD pair. I'm looking for a gain towards 1.32, unless we break 1.23 first.

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