15 July 2009

Comparing Risk Proxies and CAD

  • EUR/JPY chart does not look bullish despite stock rally (good GS results)
  • Tough resistance around 135
  • EUR/JPY down = Risk Aversion
  • Other Risk FX have similar charts ie not really bullish

  • eg GBP/USD indicating Risk Aversion also
  • Price action has characteristics of top forming


    • Chart is bullish CAD = Risk Taking?
    • Conflict resolved if USD/CAD bear due to specific relative US vs Canada fundamentals, not overall market beta

    • Lastly S&P500. Same look as the other risk currencies.
    • Can't make strong case for bull.
    • Easier to see bear case.


    Conclusion : CAD is a special case. Overall stance Risk Aversion.

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