Eyeing USDCAD for a sell opportunity (extract from today’s Market Forecast)

Today we will discuss about the USDCAD and related trade opportunities. The pair has formed a Harami on the daily chart, and there is a possibility that the pair might move higher and form an engulfing pattern. I think if the pair moves a bit higher from here, then we should be looking for short term sell opportunities.

Looking at the 4 hour chart of USDCAD, the pair has 20 candles ride to the upside. So, I think the pair should retrace some of its gains in the short term and move lower towards the previous major support area. On the hourly chart, there is a bearish hidden divergence as well. So, if the pair moves a bit higher to around the 1.0910 or 1.0920 levels, then we will enter into a sell trade as shown in the 15 minute chart below.

Initial target should be around the 1.0870 level, and final target could be around the opposite band of Bollinger on the 4 hour chart. Stop should be placed above the last high.

Reviewing Friday’s events and trades
On last Friday, the US Nonfarm payrolls and the unemployment data were released, which surprised the market. The Nonfarm payrolls registered only a gain of 74K, missing the expectations of 196K. On the other hand, the unemployment rate fell from 7.0% to 6.7%, which was a great sign. The decline in the Nonfarm payrolls may be due to the weather. Overall, the data was mixed, and weighed on the US dollar. As a result, the pairs like EURUSD, GBPUSD, AUDUSD and NZDUSD climbed after the data release.

Fundamental Outlook for the day
Today, there is a major risk-event scheduled for the US. The US retail sales data will be released later during the day. Earlier, in the European session, the UK inflation data was released, which missed the expectations of 0.5% and registered a reading of 0.4%. The GBPUSD traded a bit lower after the release. Furthermore, I do expect volatility later in the day, as we have a risk event for the US, and a FOMC member will also be speaking today. So, trade accordingly.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURJPY, NZDUSD, EURAUD, EURUSD and EURNZD.
Get it HERE: Vladimir’s Markets Forecast

I wish everyone a green week friends. Happy trading!

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