Forex Investment and Currency Trading

The decline in oil prices in recent weeks has applied downward pressure on the currencies of several oil exporting countries. Within the commodity currency space, the Norwegian krona has underperformed the Canadian dollar, but CAD/NOK appears to be posting unsustainable highs from a technical point of view. The pair recorded new recent highs on three separate occasions with the 15-day relative strength index not matching those new highs (triple divergence), suggesting that a top may finally have been reached. The first major level of support is created by the 23.6% retracement (5.629) of the rally from April 23 to November [...]

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USD/CAD witnessed a sharp rejection of the 1.3000 level on October 28 after the daily studies formed a bearish divergence from oversold levels. With the resulting sell-off to 1.1477 resolving this divergence, we now focus on an important pivot point at 1.1840. A daily close above this resistance trendline would generate a bullish trend reversal – and effectively terminate the retracement phase that is underway. This outcome would then favour a price extension to resistance levels at 1.2110 and
1.2436. Support is located at 1.1477 and 1.1313. Note that 61.8% Fibonacci retracement of the September-October advance at 1.1339 has contained the [...]

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USD-CAD turn from 1.30+ set a near-term top
1.1300/1.0940 support is expected to be tested over the coming weeks
Technically, clients should stand aside for now, buy the dip to 1.1300/1.0940

Analysis – Daily Chart
After finding sellers at 1.3017, the sharp downward reversal in USD-CAD should extend towards 1.1340, the 61.8% retracement of the rally from 1.0300. The 20-day Moving Average (MA) at 1.2031 has been broken, as has the 1.1900 congestive support area, which is now expected to offer resistance. While the longer term view argues for a USD-CAD rally towards 1.45, short-term USD losses look open to extend, with daily momentum [...]

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Measuring markets with price bars

Most charting systems are set to default to show bar charts, probably the most widely used form of charting among Western traders. Bar charts are composed of price bars, which encompass the key points of each trading period – namely, the open, high, low, and close each bar is displayed as a vertical line with a tick mark on each side of the bar. The tick mark on the left side of the price bar represents the open of the period; the tick mark on the right side is the close of the period; and the [...]

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A breakout or break refers to a price movement that moves beyond, or breaks out of, recent established trading ranges or price patterns captured with trend lines. Breakouts can occur in all time frames, from weeks and days on down to hours and minutes. The longer the time frame, the more significant the breakout in terms of the overall expected price movement that follows.
In the very short term, prices on a 15-minute chart may establish a trading range of 20 to 30 pips over several hours, for example. A breakout on such a short time scale might result in a [...]

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