Thoughts on EUR/USD & CAN/USD
The daily charts in both the EUR/USD and CAN/USD futures are strikingly similar. Both show a consolidation pattern that has continued to compress and is nearing the point where a breakout is imminent...
Although this pattern can precipitate a breakout in either direction, the fundamental story leads me to believe that the upside is more likely.
The ECB has gone "all in" on its bailout strategy and has assured the markets that the Euro will exist, in current form, for the foreseeable future. Couple that with the pervasive need to unwind long term market shorts and its reasonable to believe that the euro has some upside. Both currencies will also be affected by the Fed's ongoing dovish stance, which was reiterated recently by another Fed Governor.
In December Canadian dollar (CDZ2) we will look to get long if it trades above 102.30 and then add to those longs above 102.50...A settle below 101.00 and we would be stopped-out...
In the December EuroCurrency we would look to get long above 130.10 and add to those longs above 130.90..a settle below 128.10 is our stop.
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