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Consecutive Inside Days has USD/CAD Set Up for Volatile Move

By:   James Hyerczyk
  • 04-07-2008
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General Analysis

The USD/CAD is trading in an "inside range of an inside range".  These consecuitve inside days has created the possibility of a volatile move.

Gann Angles Analysis

At this time, two slow-moving Gann angles are providing both support and resistance.

Resistance is coming from a downtrending angle from the 1.0323 (06-10-08) top at 1.0233.  This is currently short-term resistance and a potential break out area.

Support is a pair of uptrending angles from the .9818 (05-21-08) main bottom. The USD/CAD has been hugging this angle, at 1.0138 today, for the past seven days.  If this price fails as support today, then look for the break to continue down to .9978.

Swing Chart Analysis

The USD/CAD is trading inside a couple of ranges.  The main range is .9816 to 1.0323 with a retracement zone at 1.0071 to 1.0011.  The bottom on June 27 at 1.0047 fell inside of this retracement zone.

The short-term range is 1.0323 to 1.0047 with a retracement zone at 1.0185 to 1.0218.  This zone is currently functioning as the resistance.

Trading Ideas

With the main trend up, 1.0138 offers the best place to buy, looking for a breakout through 1.0233.

Counter-trend traders should look to sell a rally into the resistance cluster at 1.0218 to 1.0233.


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Content Provided by:
James Hyerczyk

James A. Hyerczyk is a registered Commodity Trading Advisor with the National Futures Association.

Mr. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor.


DISCLAIMER:
Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. The value of currencies may fluctuate and investors may lose all or more than their original investments. Risks also include, but are not limited to, the potential for changing political and/or economic conditions that may substantially affect the price and/or liquidity of a currency. The impact of seasonal and geopolitical events is already factored into market prices. Prices in the underlying cash or physical markets do not necessarily move in tandem with futures and options prices. The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds and such may work against you as well as for you. In no event should the content of this correspondence be construed as an express or implied promise or guarantee from James A. Hyerczyk and J.A.H. Research and Trading or its subsidiaries and/or affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions may make it impossible to execute such orders. Likewise, strategies using combinations of positions such as "spread" or "straddle" trades may be just as risky as simple long and short positions. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.


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