Wednesday, May 5, 2010

5/5 Forex: EUR/CAD and NZD/USD

Two currencies are showing new phase shifts on Person's Proprietary Signal: EUR/CAD and NZD/USD, both to bear.

The EUR/CAD (euro-Canadian dollar) has been declining for three straight days, a move that looks impressive on the chart as it plummets 2.8% from Monday's high. In reality, it's far less impressive, having a net downward move of only 0.6% from Friday's open.


Before today, all of this Sturm und Drang took place amid a pps bull signal. The slight bounce from today's new three-month-chart low leaves the price at its prior low point seen on April 23. So, all in all, much less than it seems.

As a trader, I doubt that I would take this signal. It's all to frothy. But, I'm running a mechanical study here. The stock is already trading entirely below the pps moving averages, so it qualifies for the Watchlist.

Reversal Levels
  • C$1.3593, +2.7%
  • C$1.3472, +1.7%
  • C$1.3242 <== You are here.
  • C$1.3237, -0.04%
  • C$1.3217, -0.2%
I'd note that the euro-loony pair is trading around the lowest low recorded since forex began, or at least since my charting software starting getting data, back in November 2007.

The downside pivot is at $1.2988.

The NZD/USD pair shows a similar sharp decline from a short-term rise, although with a larger net decline. The kiwi-greenback pair is trading at a level around the low set on April 29.

Reveral Levels
  • US$0.7325, +2.3%
  • US$0.7161 <== You are here.
  • US$0.7097, -0.9%
  • US$0.7069, -1.3%
  • US$0.7052, -1.5%
This pair has done a lot of sideways movement over the past few months, so it's in a very congested area that will make progress halting, if progress there be.


The Investor's Guide to Active Asset Allocation: Using Technical Analysis and ETFs to Trade the Markets

Martin Pring's detailed deconstruction of the economic cycle: What sorts stocks to look for at each stage of the recovery. A masterful analysis.



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