Daily Analysis: Potential sell opportunity in the USDCAD

USDCAD is trading around the critical levels, in my opinion, after the recent high in the pair. There is a bearish hidden divergence on the 4 hour chart for the pair, and we also had over 20 candles ride on the daily chart. We also have divergence on the 30 minute and 15 minute chart. So, I think the pair can move lower from the current levels, as there is more room to the downside left.

Looking at the hourly chart of USDCAD, the pair is forming a bearish divergence. There are several resistances on the way up for the pair, as can be seen in the chart shown below. The hourly 200 moving average is also sitting around the resistance levels to act as a hurdle for the pair. So, I think every major rally in the pair can present us a sell opportunity in the short term. Remember, we want the pair to stay below the critical 1.1150 resistance level in order for our trade to be valid.

Initial target should be around the opposite band of Bollinger on the hourly chart, and final target could be around the 20 day moving average. Stop should be placed above the 1.1150 level.

Reviewing yesterday’s events and trades
Yesterday, in the European session, the Swiss unemployment data was released. The outcome was on the positive side, as the unemployment rate (seasonally adjusted) came in line with expectations, and non-seasonally adjusted registered a better than expected reading. The USDCHF was seen trading a touch lower after the data release. Later, the Euro zone’s Sentix investor confidence was released, which jumped from 11.9 to 13.3. The EURUSD is trading higher intraday. Earlier, in the Asian session, the Australia’s home loan data was released, which registered a better reading. The AUDUSD is trading higher after the release, and trading close to the 0.9000 resistance level.

Fundamental Outlook for the day
Today, in the NY session, the Fed’s Yellen is scheduled to testify. This can turn out to be a very important event. Her comments will be eyed carefully, and the market might react to her views on the Fed’s policies. So, we need to be very cautious while trading around this event. Later during the next Asian session, the Chinese imports, exports and trade balance figures will be published. The outcome of the risk-event may weigh on the risk correlated currencies. The pairs like AUDUSD, NZDUSD and EURUSD may react sharply. A disappointment may push the pairs lower, and any positive data may help the pairs to gain some ground.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: GBPUSD, NZDUSD, AUDUSD, AUDNZD and USDJPY.
Get it HERE: Vladimir’s Markets Forecast

I wish everyone a great week. Happy trading friends!

Click To Join Our Community Telegram Group