Good Evening,

I am going to continue my oil and USD/CAD tirade (see previous articles for earlier discussions), but first, as always, fundamentals. Empire State Manufacturing led us off and it was...negative. So too were the employment and new orders components. I am surprised the markets didn't jump 200 points! Bank of Japan press conference and claims on Thursday are the shining stars of a rather dull week of economic data. Usually, when there isn't any data the markets grind higher. Then again, when do the markets not grind higher.

Technically, you know that I have been keeping an eye on weakening economic data, rallying equity prices and the "drag up" in oil prices. The only reason we went from 80 to 100/bbl (25% in 2.5 months) in oil is because the equity markets brought us here, not due to increased demand. So I watched it and watched it and watched it and as I mentioned to you last week, I thought that 100/bbl could be resistance. We hit it late last week and declined to 95 this week. 

Past performance is not indicative of future results

No don't get me wrong, I am still bullish the equity markets and thus oil, but there could be the possibility of a double top. On the opposite side of things, you have the USD losing ground to the CAD as oil prices shoot higher due to a weakening dollar (oil is priced in dollars) and the fact that the CAD currency (the loonie) is tied so closely to oil exports since that is a major export (and hockey - thank you very much Sid the Kid Crosby). First up the USD/CAD on a weekly and then on a daily:

Past performance is not indicative of future results

Past performance is not indicative of future results

If oil double tops, will the USD/CAD double bottom in the low .9600 area?

Aside from some "longer term" forex opportunities, I am still approaching the markets as a day trader with caution and not expecting to trade every single day. Take a look at the overall daily range in the majors today and you tell me if they are full of opportunities or quite rangebound with smaller than average trading ranges.

And a quick shout out to the crowd at the U of U - great energy during the first class and good questions. Be prepared to answer homework questions on Monday!

Happy Trading and Be Environmentally Cool

Coach Brian

Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.