The Forex Pattern Price Time Report - USD CAD - Evening Session

Based on the trading action Sunday night and early Monday morning, it looked as if the major Forex markets were ripe for a turnaround versus the Dollar because of the escalating conflict between Russia and Georgia.  Crude oil had nudged higher as the market began to speculate that oil transportation on the Caspian Sea may be interrupted.  Commodity markets were trading firm in anticipation of a possible short-covering rally.  Trapped longs thought they finally caught a break and would recover some of their losses.  

All of the major Forex markets were beginning to form closing price reversals. Sometime about mid-morning traders did not get the continuation rally in the crude oil as expected, and the market turned down.  The weak longs that had supported the market overnight could not maintain their long positions and liquidated.  This action wiped out early gains against the Dollar and the main trend resumed.  What this action demonstrates is higher crude will break the Dollar, but it is going to have to be a trend up or an extreme one day rally.  Until commodities can stop going down, look for a higher Dollar.

The USD CHF tried to post a top on the strong oil market and in anticipation of a stock market break, but the reversal top failed to materialize.  The strong close has this market in a position to break out above a Fib retracement level at 1.0865.  The next upside target is 1.1000.  Expect traders to continue to seek the higher return of U.S. assets.  A break under 1.0630 will signal weakness.

PATTERN

Main Trend:  Up
Main Trend Top:  1.1107 (02-13-08)
Main Trend Bottom:  1.0010 (07-15-08)

PRICE

1.1215        Gann Angle Down
1.1107        Main Trend Top (2-13-08)
1.0965        Weekly Gann Angle Down
1.0865        .618 Retracement

1.0859           New York Close

1.0810        Gann Angle Up
1.0630        50% Retracement
1.0475        Weekly Gann Angle Up

TIME

Aug 9             90-Day Cycle
Aug 13          180-Day Cycle
Aug 14          180-Day Cycle