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Weak Crude Oil Could Drive Down Canadian Exports
By: James Hyerczyk - 20-07-2008
1votesWeekly Recap
The USD/CAD received upside support most of the week as the sharp break in crude oil put pressure on the Canadian Dollar.
Fundamentals
Although lower energy prices are supposed to be beneficial to an economy, in this case, they will adversely affect Canadian exports.
Overall, the Canadian economy is still stronger than the U.S. economy, but a shored-up financial sector, lower oil prices and a bullish stock market may draw funds out of Canada and into the United States.
Technicals
The May to June range is .9818 to 1.0323. Based on this formation, the pair found support after a break back to a key retracement zone at 1.0070 to 1.0010.
The actual break exceeded the downside objective at .9974, putting the market in an oversold position.
After regaining par, the market closed firm, but could not form a clean reversal bottom.
Regaining 1.0070 early next week will put this pair in a strong position to rally to 1.0149 to 1.0190.
Next Analysis: Assets May be Shifting from Aussie into U.S. DollarContent 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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