Hot-Charts
USDCAD Eyes 1.2660s
by
Mar 30, 2009 11:55
| 5 Comments
CAD hastily drops across the board at the first sign of trouble in risk appetite as the broadening sell-off in equities boosts USDCAD past the $1.25. Weve long mentioned the positive correlation involving major equity indices with Aussie and Kiwi pairs. But we also mentioned the relatively high correlation of -0.72 between USDCAD and S&P500 Year-to-Date, suggesting high correlation between CAD and equities. It is too early to expect equities to head back towards March lows at this point, but USDCAD will likely have to re-test 1.25 before calling back 1.2580s and 1.2660s.
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Keep a close eye on equities for whether USDCAD will extend gains past 1.2650s. The high was 1.2640s. If US stocks do better this time, then USDCAD has fewer chances of hitting 1.2660s any time soon. BUT, the concentration of event risk from Wed til Fri suggests plenty of opportunities for selling CAD. TL support at 1.2420s. EURUSD support at 1.3070s. but more likely to see 1.30 before 1.37
Ashraf
I'm with you on the 100+ pips - time to take our money and run? Looks like the selling should extend into the Asian session and push USD/CAD even above 1.2700 - perhaps I'm a little too optimistic, though.
Euro targeting 1.3000, are you sticking with that as mentioned in your interview?
Thanks
TAHA, correlation measures the relationship. if it is a HIGH number close to 1.00 it means it goes up as the other one goes up, and when it is NEGATIVE it means nthe opposite.
Ashraf
Great call on the last hot chart about EUR and OIL - looking forward to the result of this one also!!! Thanks a bunch
I am not expert or professional . I am just begginer , So could you explain (the relatively high correlation of -0.72 between USDCAD and S&P500 Year-to-Date) ? .
Thank you .
Taha