Canadian back to parity with the US Dollar?

Not sure if parity will be back that soon but we might be getting close. For this post I have two chart to review which have the USDCAD going as low as 1.0400 in the upcoming weeks.




First there is the 4hour chart (also can be seen on the daily chart) which shows a beautiful triangle which started all the way back in October 2008. At the time of me writing this blog the pair is about 150 pips away from the bottom of the triangle. If we are to cross below the bottom and break the triangle at around the 1.1900 levels, we can see the pair trickle all the way down to 1.0200 if we go by the assumption that a triangle break equals the the distance between the first bottom and first top of the triangle (we can call that the mouth). The opening of the mouth is from 1.1300 to 1.3000 or 1,700 pips! Which is were I got the 1.0200 target earlier.




The second chart we can examine is the weekly chart which shows a DeMark/Mouteki break setting up. The pair is currently below the break line so an entry as these levels would be good. The break will be confirmed if by the time the new candle forms we are still below the trend line. The target for the break is at 1.0670 which is around 1,420 pips from were we are today.

Lets wait and see what happens by Friday (1/30) and if we stay below the trend line we should definitely short this pair!

Potential channel breakout on the AUDCAD

The AUDCAD is currently setting up in a very nice uptrend channel which started towards the end of November at around the 0.7900 levels and is currently trading at the 0.8500 levels.



In the best channel break situations you would want an uptrend channel to be broken down and a downtrend channel to be broken up. In this situation we are dealing with an uptrend channel which is close to being broken at around the 0.8400 levels. If the break is to take place and we break below .8400, we can look at various take profit targets and areas to add to our positions. Those could be setup by using Fibonacci numbers as a guide drawn from the bottom of the spike on Oct 10th, 2008 and the latest high from January 5th, 2009. The targets would be 0.8320, 0.8097, 0.7912, and 0.7741. Let's monitor the situation tonight and over the next couple of days to see what happens.