AUDCAD: Short Trade Triggered On Support Break
By DailyFX - 02/21/12 - 9:23 PM ESTBy 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 position as a way to gain exposure to relative Chinese versus US economic growth expectations. Australia and Canada are key commodity suppliers for China and the US respectively. Chinese GDP growth is forecast to slow in 2012 (8.5% vs. 9.2% in 2011) while that of the US is seen accelerating 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.
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