USDCAD has always been an interesting pair to trade, and that is the reason why we will talk about it today and related trade opportunities. There is an important up-move trend line as plotted on the weekly chart shown below. If this trend line remains valid, then I think the pair might re-test the previous highs again.
Looking at the daily chart we have a down-move trend line too as plotted in the chart below, which is keeping the pair below critical swing levels. However, I think after a small drop or retracement; we should see the pair trading higher again.
So, I think we should be looking to buy USDCAD in short to medium term. Currently, there is another down-move trend line as shown in the 4 hour chart below. If the pair manages to break this trend line and the most relevant resistance currently at around 1.0425 and closes above it, then we will enter a buy trade. Another way to trade USDCAD would be to buy from the lower levels like 1.0360 along with a bullish hidden divergence on the daily and 4 hour chart.
Initial target should be around 1.0450 and final target could be around the last highs. Stop should be placed below the last support in the first case and below the previous low in the second case.
Reviewing Friday’s events and trades
Friday was one of the eventful days as the US dollar gained on the sixth consecutive day. US ISM manufacturing index data was released on Friday, which jumped higher to 56.4 beating the expectations of 55.0. A better ISM reading will now weigh on the expectations of the upcoming NFP numbers. Earlier in the Asian session, Australian retail sales data was released, which jumped higher from 0.5% to 0.8%, and helping the Aussie pairs to gain some ground.
Fundamental Outlook for the day
Today, there is not much of important fundamental data scheduled for the US, and as a result we can see some consolidation ahead in the day. Some of the low-risk events include, US factory orders data and Global Semiconductor sales data. Other than this, FOMC member Rosengren will also be speaking later in the NY session. Later in the next Asian session, the RBA interest rate decision is lined up with the expectation that there will be no change in the cash rates. However, RBA statement would play a key role for the Aussie pairs. So, keep an eye on this event if you are trading Aussie pairs.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, EURNZD, AUDCAD, AUDNZD, GOLD, NASDAQ and USDTRY.
Get it HERE: Vladimir’s Markets Forecast
Have a Green week friends. Happy trading!
