AUD/USD and USD/CAD broke out on thin volume

Posted on December 29, 2009 by Yohay
Filed Under Forex News | 3 Comments

The Canadian and Australian dollars enjoyed the greenback’s weakness to make breakouts. This happened without any substantial data coming out of these countries, and also on low volume. Positions should be carefully made on these currencies.

In the meantime, EUR/USD and GBP haven’t made impressing moves. That’s another reason to be cautious about these moves.

AUD/USD managed to beak the all-important 0.8950 resistance line. This line worked as strong resistance in the past, and after an initial bounce, the Aussie broke this line and remained above it for a long time.

Contrary to those events, this break should be taken with a grain of salt. The last week of the year, between Christmas and New Years Eve, is probably the slowest in the year. Many traders are on vacation, and the volume of trade is low.

Currently at 0.8980, this breakout could be proven false soon. If AUD/USD does stay above this line, the move can be clearly confirmed only next week, when everybody’s back in business and volumes will be high again.

Check out the AUD USD forecast for more support and resistance lines.

The Canadian dollar has a similar story: USD/CAD broke below 1.04 and now trades at 1.0390, after reaching 1.0367. Also here, an important an well-tested support line was broken – 1.04.

The Canadian dollar showed strength in the past weeks, and had good reasons for it. While other currencies surrendered to the dollar, USD/CAD remained in the same trading range: 1.04 to 1.0750. Now it took one step further and went lower. Also here, the low volume requires great caution.

For a deeper technical analysis of USD/CAD, check out the Canadian dollar forecast.

Enjoyed the post? You may want to subscribe by RSS feed or Email.



» «

Comments

3 Responses to “AUD/USD and USD/CAD broke out on thin volume”

  1. Forex Daily Outlook – December 30th 2009 | Forex Crunch on December 30th, 2009 12:01 am

    [...] day before New Years Eve, there are a few events that will move the currencies on the continued thin trading. Chicago PMI will stand out. Let’s see what’s up for [...]

  2. Forex Weekly Outlook – January 4-8 2010 | Forex Crunch on January 2nd, 2010 3:24 pm

    [...] the past holiday weeks we’ve seen false breaks. This week, everyone’s back on the scene, and such events are less likely. Let’s [...]

  3. USD/CAD Outlook – January 4-8 2010 | Forex Crunch on January 2nd, 2010 5:03 pm

    [...] of USD/CAD had a false break during the thin volume of the holiday week, but the pair is back into the range as traders return [...]

Leave a Reply




Bad Behavior has blocked 1637 access attempts in the last 7 days.