seems Like some entries for longs on USD/CAD is happening I think 1.07 area could drive it to 1.14 although for now on 1.0927 1.0739 range
Ivanovich, if the weather forecast says it's going to be sunny, and you have a picnic, and it rains, does that mean the weather is irrational? Or that the forecaster needs to improve his model? Currency trading is still mainly done by big, institutional players who employ professional traders. They do not employ children throwing spaghetti. Because traders have many different theories and models, and pull in different directions, the outcome of all their rational decisions is as unpredictable as the weather. Please note that oil is back to $67, so the resource boom may be finding new legs. My new improved model of USDCAD envisions a feedback loop between the loonie and Canadian economic data: low loonie -> strong eco data -> high loonie -> weaker eco data -> low loonie. I am predicting that CAD will stay below 1.10 until the effects of the high loonie percolate through the system - maybe a month or two - after which the latest resource fad should start unwinding and bad export/employment data puts people off CAD. I am still calling for $40 oil and USDCAD at 1.20 by the end of the year, on the back of an American recession and possibly a market crash in the fall.
FRESH lows in USDCAD b4 the Canadian Leading Indicators prompted me to get long USDCAD @ 0825 LEI being in-line with expectations could help my long position we will see The dollar index is also at a crucial level and after last night's dollar slaughter I am looking for some profit taking duringthe US session Will need to look at the direction of US bond market. Here is my trade USDCAD L open @ 0825 stops @ 0810 target @ 0925 Good Luck and Good trading!
The weather is not based on emotion. Trading sometimes is. Once again, it comes back to the human element of emotion. Emotion is not based on logic, it is based on feeling. We can go round and round on this all day. $40 oil? Not happening. Meanwhile, the USD/CAD trade marches lower. A possible buck in the system will be if the Alcoa bid doesn't happen. That M+A purchase was a big reason this march began in the first place.
There's talk of a reverse bid now - Alcan buying Alcoa. Having penetrated a 30-year support line, USDCAD is in terra incognita - "here there be dragons". Nobody knows how low it will go, or why it is where it is. Way more longs than shorts now, though, so the betting is on recovery. People say the market is based on emotion, but that's dumb. It's based on mass behaviour - millions of traders making what they think are rational decisions, and the outcome is exactly like the weather: the complex and unpredictable net outcome of all those decisions. "Herd behaviour" means positive feedback loops, like the ones that feed hurricanes. So a hurricane has just swept through USDCAD: was it emotional? The individual trader of course can be and is emotional: he's driven by fear and greed. But the individual trader's emotions affect nothing except his own bank account. In the aggregate, all those emotions cancel each other out. Because what's fear for a long is greed for a short, and vice-versa.
I see no talk of any reverse bid or Alcan looking for Alcoa. What I see is Alcan talking with BHP looking to make a deal to fend off Alcoa.
As for individual traders and emotion - yes. Some are based on emotion and some on fact. The herd mentality is not based on fact. The few driving the herd may be, but not the herd itself.
Whats going on? no usdcad ideas? just herd mentality? well herd mentality says this forum is becoming about herd mentality