AUDCAD: Short Trade Triggered On Support Break

By Ilya Spivak, Currency Strategist

Strategy: Short at 1.061 9 , Targeting 1.0523

AUDCAD followed a break lower from a rising channel carved out since early January with a push through support in the 1.0645-64 region marked by an upward-slowing trend line set from the November 23 low and the October 28 swing high.

Fundamentally, we see a short AUDCAD positionas a way to gain exposure to relative Chinese versus US economic growth expectations. Australia andCanada are key commodity suppliers for China and the USrespectively. Chinese GDP growth is forecast to slow in 2012 (8.5% vs. 9.2% in 2011) while that of the US is seenaccelerating over the same period (2.2% vs . 1.7% in 2011).

We will enter short from here, targeting the November 30 swing high at 1.0523 as an initial objective. A stop-loss will be activated on a daily close above 1.0664.
DailyFX is the forex news and research arm of FXCM, Inc (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

Original Article: http://www.dailyfx.com/forex/market_alert/2012/02/22/AUDCAD_Short_Trade_Triggered_on_Support_Break.html

DailyFX is the forex news and research arm of FXCM (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

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