stops should be around the 50% fib 110.50

but do not be fooled, this is just a gambling move...dollar is weak....very weak

Das tut er natuerlich nicht, because he's a currency trader and has no need for any information that he decides is irrelevant.

Canadian or ANY other fundamentals are non-events here. Why? Because a) EVERYBODY is informed and b) you should have noticed by now that fundamentals have no effect on day -to-day ups and downs and c) long term predictions are about as useful as trying to predict the weather in 6 months.
Of course at one point that USD/CAD will turn around. But did you not notice that noone here or elsewhere has a clue when. Most previous predictions have proven to be nonsense. And I maintain that it will stay that way. Play the curves and stop wasting your time with fundamentals

Ja, aber er beschäfftigt sich dauernd mit ausschliesslich Canadian fundamentals und ist verblüfft wieso traders anhaltend oversell USD/CAD trotz abscheuliche Canadian fundamentals.

That is a sincere advice, coming from a stranger, well said herr, the market is pushing oil, commodity currencies and do not care about anything at the moment, as the look two years from now looks .....greener....

Every market has to turn, but for now, the trend is your friend till it moves against you.....

I disagree with many points made (we don't know how the next NFPs will come out so it is not priced in; if it wasn't possible or profitable to forecast exchange rates banks wouldn't exist; and fundamentals drive interest rates which are in turn the primary valuation tool for exchange rates. All that being said though - it is true that too many people try to oversimplify something so complex that they are asking for trouble.

Personally, I wouldn't try to fade the USDCAD drop - I too believe picking tops and bottoms on strong trends is a suckers bet which the gamblers take and professionals constantly profit by countering. My interest right now is EURCAD. Good break below the rising trend beginning in Nov of 07. If we get a confirmed move below the 50% Fib / former swing low (May 7th) around 1.5450; I'm going to start to build a position.

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John Kicklighter is the author of Dynamic Carry Trade Basket, Watch What The Fed Watches, and Forex Trading Weekly Forecast on DailyFX.com

Obviously... I am waiting for the bounce to make my play.

As usual John, you raised some important issues. Perhaps I exaggerated in stating point blank that fundamentals have no effect. I should have qualified my point by saying that during a world-wide depression when fundamentals suck everywhere they are not all that relevant as they are during good times. They are EVENTUALLY but it makes no sense to look at the daily publications of such data and base trading decisions on them. Examples in point: a) the prime everywhere hovers near 0.25% so how can comparing primes these days make any difference,
b) unemployment increasing everywhere, c) trade is plummeting between the majors d) banks are propped up by government promises (governments without money) and on and on, one could go on.
We found out two days ago that Canada's budget deficit will exceed 50 billions rather than the January prediction of 35 billions and unemplyment is now near 9% and increasing. And how did the loonie respond? Hitting 0.899 USD ! Is that logical if fundamentals are to be taken seriously?
As far as banks' ability to make profitable currency decisions? Yes, they do that sometimes. But among other recent events I'm reminded of what happened to the GBP some years ago when George Soros decided that the pound was grossly overvalued. He bet against the pound single-handedly and brought it down big time. He made a fortune. Not the banks, though. They weren't able to predict that the pound was about to drop like a stone. It took but a day in September 16, 1992 (Black Wednesday - Wikipedia, the free encyclopedia) for that to sink in and the British Treasury was taken to the cleaners along with many big banks who didn't know any better.
A watershed article in the Der Spiegel (May 28 2009) draws a very disconcerting parallel between 1929 and 2008, titled Lehren aus der Großen Depression - Lessons of the Great depression -
In 1930 less than a year after Wall Street crashed many banks and politicians - including President Hoover - re-assuredly announced that the crisis was over. What folowed in 1931 was the REAL bank collapse.
And what do we read these days by similar prognosticators - including Bernake - Things are now improving, the finance system is stabilized the banks are O.K. again, tatata...

I view fundamentals prognostications with much skepticism and so does apparently the currency market. Why am I not surprised.

Regards to all

Despite the rally in the rally in the Australian and New Zealand dollar's, their Canadian counterpart was otherwise stable. Needless to say, EURCAD has not gone on to follow through with the trendline break I was watching yesterday. Still waiting for a confirmed move below 1.5450 as confirmation that the bearish reversal may grow to be more involved.

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John Kicklighter is the author of Dynamic Carry Trade Basket, Watch What The Fed Watches, and Forex Trading Weekly Forecast on DailyFX.com

You bring up very good points.

I agree that day to day fundamentals will not have a lasting impact on price action - rather they will have perhaps an immediate influence on volatility and their long-term encouragement for more imposing themes (interest rates, safety of funds, capital flows, etc). However, I would argue that that is the natural course of things under most market conditions. Even in the first half of 2007, US NFPs weren't producing a lasting impact on dollar price action beyond a few hours.

On the other hand, this shouldn't be considered a sign that the market at large is ignoring fundamentals. We just need to determine what the primary concern for the broader market. In 2007-2008 it was the pace of rate cuts and the evolution of recession. The pound for example played out exactly as would have been expected considering fundamentals. Same with the US dollar when liquidity became a problem in September, October and November of 2008. Right now, we are definitely in between themes. It is still unclear whether we will have more financial troubles (I think we will when the government unwinds its aid) and there is now an interest in which economy is heading towards recovery quickest.

As for Soros, he was not alone in forcing the pound. Many banks and speculators saw the same. He didn't have the capital to manipulate trillions in euros and pound all by his lonesome.

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John Kicklighter is the author of Dynamic Carry Trade Basket, Watch What The Fed Watches, and Forex Trading Weekly Forecast on DailyFX.com

john picking tops and bottoms is the bestway,my system produced 700 pips that way this week
i am long eurgbp .8661 and the price only went against me 8 pips before i am up
almost 100 pips now.,you call that a suckers bet
that was bucking the trend,wasnt it.
it was 2 cents down from the top.
trendfollowing is the suckers bet
thats when you enter long at the top and short at the bottom.

i am long usdcad at 1.1124
cheers

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I don't think trying to pick tops or bottoms doesn't work; I just know that nearly every new trader that attempts to do so fails at it - especially the more they trade. Too many people come into the market without a strategy and try to intuit a top or bottom. Add to that, many like to revenge trade and take profits too early while allowing for deep stops and they can make their account implode pretty quickly.

And, the markets trend (whether it be up, down or sideways) 90 percent of the time. Slow reversal formations account for the other 10. Besides, you're trading strategy is for moves that last for hours and cap out at a few hundred pips. I wouldn't call that picking a top or bottom. That is swing trading.

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John Kicklighter is the author of Dynamic Carry Trade Basket, Watch What The Fed Watches, and Forex Trading Weekly Forecast on DailyFX.com

thanks john for the input
cheers

Love the discussions above ... great stuff from all sides!

Not quite everyone. Former CIBC World Markets chief economist Jeff Rubin (now private investor and publisher), who has often been quoted in this thread before by a number of us, recently predicted $225 oil. Yes $225. (though he's been wrong before, but usually pretty good w.r.t. oil)