TradersClass

Superior Trading Skills through Education

 
Canada tightens... Print
Written by Site admin   
Wednesday, 12 July 2017 16:01

 We just had Canada pop their overnight interest rate up from 0.5 to 0.75%, a 25 basis point rise as they say in the trade. It's taken them 7 years to do it and marks the end ultra cheap money that kicked off the crazy housing market with valuations way above the reach of the average Canadian.  Now they are confident the economy is sound and the oil price, on which the economy largely depends, has stabilised in recent months. So much for the announcement, you can read the story here, but it's the chart USDCAD that has been looking very interesting for some time.

cad12thjuly17

We traded in and out of the waves on the run up from 2012 through to late last year making hundreds of pips each time. The trend then cracked down. Wave theory tells us that after five up waves we should see three waves down. More correctly an 'a' wave down, a 'b' wave that atempts to get back to the high but fails at around 61.8% and this is followed by the downwave 'c' that should go to at least the 2014 lows. As you guessed, Traders Class members are running the short trades having sold the USD against the strengthening Loonie!

 

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