You should be watching AUD NZD. It completed wave 1 up, now it is retracing down in the form of A-B-C waves to 50% Fib (???), which should be around 1.1286
It should offer a good entry point for wave 3 up.
I like it, because it looks quite technical, so far no surprises or exceptions from Elliott.

Long NZDUSD is (IF) a short-term trade, as it seems to me to be in a downtrend

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USDCAD - The ratio of long to short positions in the USDCAD stands at 2.08 as nearly 68% of traders are long. Yesterday, the ratio was at 2.35 as 70% of open positions were long. In detail, long positions are 9.4% lower than yesterday and 0.9% stronger since last week. Short positions are 2.3% higher than yesterday and 18.7% weaker since last week. Open interest is 5.9% weaker than yesterday and 2.7% below its monthly average. The SSI is a contrarian indicator and signals more USDCAD losses.

Source: FXCM Execution Desk, Sample Size: 25000 Traders

For historical data and the latest charts based on the SSI please visit http://www.dailyfx.com/story/strateg...353412325.html

For information on an FXCM Managed Fund that takes advantage of the SSI, please review our Sentiment Fund at: http://www.fxcmmanagedfunds.com/ or call +1 646-432-2968.

I just bought AUD NZD long at 1.2665, at 61.8 Fib, measured from Dec 15 low at 1.1146 and Dec 18 high at 1.1422, although I am not totally convinced that it won't drift little lower. But, it seemed like a reasonable entry point.
Technical indicators (daily, hourly) are not giving much clue about the direction; only stochastic on 15 minute scale shows optimistic angle.

I just saw this news item:

"Canadian Prime Minister Harper in a Reuters interview, comments that a strong
Canadian Prime Minister Harper in a Reuters interview, comments that a strong [CAD] is inevitable because of the countrys solid fundamentals but that Canada must learn to live with a strong dollar and not an overvalued one. Specifically he says that when the currency rose to an unprecedented US$1.10 it required serious reflection; and notes that the CAD just below parity was close to real value. The Bank Of Canada, he added, saw the real value of the CAD somewhere between the 96 to 98 US cents range. Cad/Usd is currently trading just above parity at around 1.0003/1.0008 22:59 GMT -"

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So the government wants the USD/CAD to be in the 1.02 to 1.04 range is what I gather from this. Something to keep in mind as the government has some influence.

Very interesting posting Curious-Joe!

I would take Harper's commentary as a signal that they are comfortable with the Loonie's appreciation. The BOC is not keen to intervene in the markets, which is similar to many other central banks. According to the BOC website, the last time the bank intervened was in September 1998. After that, they changed their policy from a systematic intervention schedule to a discretionary one that is only to be used "in the most exceptional of circumstances."

At this point, I think a lot of CBs and governments take a lot of pride in allowing the markets to decide a currency's value, especially with all the pressure they put on China regarding the yuan. If they were to go into the markets to intervene in the currency's movements, they would no longer be in any sort of position to say that China should allow the yuan to be freely traded.

USDCAD - The ratio of long to short positions in the USDCAD stands at 2.05 as nearly 67% of traders are long. Yesterday, the ratio was at 1.98 as 66% of open positions were long. In detail, long positions are 2.3% higher than yesterday and 5.5% weaker since last week. Short positions are 1.2% lower than yesterday and 4.5% stronger since last week. Open interest is 1.1% stronger than yesterday and 0.9% below its monthly average. The SSI is a contrarian indicator and signals more USDCAD losses.

Source: FXCM Execution Desk, Sample Size: 25000 Traders

For historical data and the latest charts based on the SSI please visit http://www.dailyfx.com/story/strateg...353412325.html

For information on an FXCM Managed Fund that takes advantage of the SSI, please review our Sentiment Fund at: http://www.fxcmmanagedfunds.com/ or call +1 646-432-2968.

I would suggest this last rate cut by the BoC was done specifically to lower the CAD, so they do indeed intervene in markets when those markets threated to derail the economy. In an ideal world the CAD would have gone from 0.85 a year ago to 0.90 now. The sudden lurch from 0.85 to parity and above is very difficult to adjust to.

I'm sure there is a sweet spot for the currency (which I believe to be around $0.90) where Canada's exporting and manufacturing all do well. Unless Canada starts to create more global businesses like Research in Motion (RIMM), we will be destined to be digging in the dirt for other countries. The days of having the most reliable cheap labour are gone and won't be coming back even if the CAD retreats again. So instead of having both commodities AND manufacturing, we will end up with just commodities, which doesn't make for an economy others will want to invest in.

Enjoy these USDCAD short trades for the little bit of time they have left. It won't be too far out in the future when watching the USDCAD go back up to 1.30 will be a fun spectator sport.

Blue horizontal line (.9766) is first support, at a similar level as the Fib 38.2 %.
Parity is now resistance.

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A market either makes new lows or new highs.

I think you all know how i'm positioned. Looking to retest new lows on the usd/can. Feb 08?

I'm not sure what the game is....Bank of Canada comes out and says comfortable level above par...prime minister says real value .96-.98 I mean who are they kidding?

Is the bank of canada going to come out and say imbalance when momentum takes us through .95?

This thing is either going to trade above par (psychological level) or below it. Trading below it will signal that we will make a new low and will build momentum like a magnet.

USD bid ran into a wall....on the weekly.

As for the new year, USD bulls kind of went all out in december.

I fully expect the Gold Bulls and Dollar Bears to come out swinging in the new year. Same goes for usd/can shorts.

I fully believe the trend is back...gold moved strongly with can and aud. I think eur/pound are broken though lol.

I believe that we are both on the same page of inflation/ deflation debate. In this particular scenario, I would ignore for a minute the dollar or any other fiat currency. My argument is of deflationary nature. I will give you an example:
Let's say, a person owns a nice house that cost 800,000, which is exactly 1000 ounces of gold. Let's say, the gov't will inflate like crazy, the nominal value of the house will stay the same, but the gold will go to 1600. so, in real terms the house will loose 50% value.
If this scenario unfolds, which is quite plausible, fixed assets (houses, land, cars) will lose value measured in gold or other constant, but consumer goods (food, energy, medical services) will increase rapidly. We have already started to see this spectrum unfold, especially with energy rising 30% last month. Food also doubled in nominal prices at the wholesale level, it just hasn't trickled to the supermarket yet.

PM of Canada, Harper, made a comment yesterday that the economy in Canada will slow down in 2008, despite strong fundamentals. Also, he singled out the US as the largest trading partner and blamed the US economy for dragging the Canadian economy down.
Truth is that Canada is trying hard to diversify its economy and to trade more with Pacific Rim countries, even a pipeline is being built to Kitimat to export oil to China, but it will take decades. For the time being, the US is the largest trading partner and it is a natural fact, considered the geography.

The dollar's losses haven't been as severe in the USDCAD pair, but nevertheless, it is testing support at the 38.2% retracement level of the rally from 0.9055 - 1.0248 at 0.9792. A break below here goes on to target 0.9652, but I'm thinking the dollar's drop may be a bit overextended against currencies like the Euro, and that USDCAD will continue to consolidate around the 0.98 handle.

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Would you then recommend to go long USDCAD at 97.20-50?

At what point does the crowd say...

Wait a minute..in november...gold was 850/oz, Oil was ~100/barrel....EUR was closing in on 1.5....cando was .9100 and falling...wait a minute....were back to november market....sell sell sell.

Smells like new lows coming up to me....

Jamie how can we be in a ABC correction (B down) when your counts for most of the other currecy pairs. EUR and AUD have us going into a wave 5?

Someway somehow we are in the same wave count for the usd/can.

USDX is sick, it's rolling over hard. It will not take long for an acceleration of selling.