Forex Investment and Currency Trading

USD/CAD trading well within recent lowered ranges. There has been no test of bullish
breakout, but there is no upward momentum building.
USD/CAD’s overnight low is again close to short-term support at 1.0424. The sell off from
recent highs has stalled, but USD/CAD lingers well below rally triggering resistance.
USD/CAD remains dominated by the bullish breakout above 1.0343 on August 4. However, the rally went to far too fast and USD/CAD remains in consolidation mode. The next major move is still expected to up not down, until the bullish breakout is rejected.

Overnight Spot Trading Activity: What Asia Gives, London Takes Back
Asia: Trading in USD/CAD [...]

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Durable Goods Orders (Survey: 0.0%, Actual: 1.3%)
USD
The lingering shadow cast by the outlook for US financials and GSE’s continue to provide headwinds to sustained USD upside. USD has been under broad based pressure with sentiment not helped by a pick-up in oil prices as tropical storm Gustav nears the Gulf of Mexico. US data yesterday painted a mixed picture on the housing and labor markets but ended up playing second fiddle to the German Ifo. US new single-family home sales rose 2.4% in July, but sales figures for May and June were revised down by 46K, and the inventory [...]

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Although USD/CAD has broken bullishly out of its eight month trading range, the near-term upside is limited from an interest rate perspective. A weaker CAD removes an important factor that had helped keep Canadian inflationary pressures under control. With monetary policy already stimulative, the BoC is unlikely to corroborate market expectations of at least one rate cut by year end.
BoC is likely to disappoint the market by failing to corroborate rate cut expectations, as the BoC already considers policy to be accommodative. This will provide some resistance to USD/CAD rallies from the interest rate perspective.
CAD, the BoC’s inflation fighting co-pilot [...]

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Trending and Trading Markets
Markets have traditionally been classified as trading markets or trending mar­kers, meaning they move predominantly sideways or predominantly up or down. For an excellent modern look at this conventional approach get Ed Ponsi’s FOREX Patterns and Possibilities: Strategies for Trending and Range-Bound Markets (John Wiley & Sons, 2007).
Market Environments (ME)
ME is a method for determining a more meaningful and accurate profile of any market. It is enormously useful as a complement to your trading method, money management, and performance analysis. It can also be used in what is called “quant” in the industry—risk, portfolio, and money man­ager [...]

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USD bounced against all of the majors in overnight trade and DXY rallied to 76.4 from a low of 76.0.  Nonetheless, baring a further spike in the remainder of today, DXY will record its first weekly loss this week after five successive weekly gains. NZD and GBP are notable underperformers against the generally strong USD today, the latter in particular reflecting poor domestic news flow (see below).  There are no further key data scheduled for release today and attention will focus on Fed Chairman Bernanke’s speech on financial satiability at the Fed’s annual Jackson Hole symposium. In his opening remarks [...]

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