CAD, Aussie and Gold Monthly Overview and Weekly Update - March 04/08 close

USDCAD

Monthly Overview - March 2011

Still on a steep descent and inside a falling wedge,  the Loonie ended February on a lower low at 0.9720. I would expect a continuation to reach the lower line of the wedge, near October 2007 lows at around 0.9400. A further extension to reach 161.8% Fibonacci level would bring us to November 2007 lows near 0.9000. Should this pair bounce from the bottom of the wedge, my expectations are for a return to parity level on a first step, then it will highly depend on the US Dollar regaining its former strength and reach above to the successive round-numbered levels at 1.0200, 1.0300, 1.0400, 1.0600 and 1.0800.

Last week the USDCAD reached the 161.8% extension of its previous swing low as expected. It did so at the very beginning and the rest of the week was spent in tight consolidation between 0.9750 and 0.9700, after a quick retest of the broken level at 0.9770. I would expect a continuation in extension to 0.9615/0.9595 (127% Fibonacci levels in weekly and daily charts, respectively). However and as said above, we could have a bounce from support at 0.9650 for a recovery to around 0.9780/0.9820 which is the previously broken daily support level, and near the middle line of the Bollinger bands.

AUDUSD

Monthly Overview - March 2011

We seem to have reached the top of the rising wedge and a fall would be due very soon, I would expect a break of the bottom line and a fall towards next support and 38.2% Fibonacci retracement at 0.9420/00 medium-term.

(See also: A thorough monthly overview of the Australian Dollar - March 2011)

The Aussie failed at surpassing level 1.0200 last week and ended on a spinning top candle, while it shows a steady consolidation pattern on the daily charts. Price was strongly rejected from 38.2% retracement and support at 1.0076 on Friday, but a new low was reached yesterday near 1.0050 and the overall tone for this week is clearly bearish. However we can feel a struggle to remain above 1.0100 and price has been stalling around that level for a while. I would expect a return to parity in the next days and maybe lower near the weekly middle line of the Bollinger bands (0.9960/50). If the parity level doesn’t hold as support, we would be aiming towards January lows at around 0.9870/50.

XAUUSD (GOLD)

Monthly Overview - March 2011

A thoroughly bullish month for Gold but however none of the highs of the previous three months has been reached in February. I would expect some ranging between 1430.00 and 1330.00. A break of level 1300.00 would lead lower to next support at mid-2010 lows.

The rejection of 1440.00 resistance (near the 127% extension of the actual weekly swing high) and subsequent stalling and consolidation between this and 1400.00 level on daily charts could be signaling a pause before a correction takes place and bring us back to the 1360.00 support level (61.8% daily Fibonacci retracement on the swing and around 50% of the previous weekly swing range). I think this correction can go as steep as 1320.00/1300.00 which is also the daily SMA200 and weekly SMA34.