The Canadian Dollar on a weekly chart has formed a nice symmetrical triangle, but who is going to win the fight? The fundamentals are going to be the determining factor. There are two ways you can look at the Canadian economy.

      For the bulls, international investors bought C$10.7 billion in securities. Is this a pre-warning to the bears that the Canadian economy is better than any other G8 countries. Canada's inflation record this year is better than the other group of seven industrialized nations. Consumer Prices advanced 2.2% in May from a year earlier, compared with US at 4.2% and the UK at 3.3%.

     Economists are looking at peak inflation in the first quarter 2009 between Jan and March. At a rate of 4.3%. After March they looking for slow down to 2.9% going into the following quarter.

     Now for the bears, if reports come out worse than expected would be good to drive the Loonie down and also better than expected reports in the US and UK. A continued stalling in export and home sales will also drop the Canadian Dollar.

     Canada is the second biggest crude reserves behind Saudi Arabia, and is the second largest wheat exporter. If crude and wheat continue there downward move will drive exports down.

     For a trade recommendation I am looking at going for a reverse ratio spread. This spread is initiated by selling an at-the-money put and call, and purchasing two or more out of the money puts and calls. You would like two obtain a credit or at worse break-even on the debits vs. the credits. You do not want to hold the position any longer than 30-45 days left and you want at the least 3 months left at time of entering.

     Sell the December 9900 put for 222 or $2220.00 and buy two 9550 puts for 95 or $950.00/each. At the same time sell a 9950 call for 222 or $2220.00 and buy two 10300 calls for 99 or $990/each. The options have 137 days left. For money money management or exit strategies please contact me at jimmy@transworldfutures.com .

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To contact Jimmy Tintle email is jimmy@transworldfutures.com or reach him by phone at 1-877-843-4519. Transworld Futures offers a wide variety of trading tools, webinars, and simulated trading. We also various types of accounts from deep discount online trading to managed futures, and FOREX accounts.