Looking forward to buy USDCAD from major support levels

USDCAD broke an important up-move trend line on the daily chart, and moved lower. However, the pair is now heading towards the critical support levels as plotted on the daily chart shown below, and I think we should be looking to buy USDCAD from any of these support levels.

Looking at the 4 hour chart of USDCAD, we have 20 candles bear ride and continuing divergence forming, which suggest we might get a push to the upside again.

We have a down-move trend line as plotted on the 1 hour chart shown below. We can trade USDCAD in two ways. First, look for the pair to move down close to any of the support levels, make a stop, and form a divergence on 1 hour and 4 hour chart along with a bullish candle pattern to jump in a trade. Secondly, you can also enter on break and close above the trend line on the 1 hour chart at around 1.0320/30. Remember, pair should hold above the previous resistance and trend line for trade to confirm in order to avoid chasing any false move. Initial target would be 1.0380/90, which will coincide with the broken trend line on the daily chart. Final target could be next major resistance at around 1.0440. Stop should be placed below the previous low.

Reviewing yesterday’s events and trades
UK employment data, RBNZ interest rate decision and Australian employment data turned out be major market moving events yesterday. GBPUSD soared higher and traded as high as 1.5828 following better than expected employment report. RBNZ too kept the interest rate unchanged, and released a little less dovish statement, which helped NZDUSD to gain some ground overnight. Australian employment figures missed the expectation, which caused AUDUSD to drop from daily high of 0.9350 towards 09240.

Fundamental Outlook for the day
US initial jobless claims and Federal Budget Balance data are scheduled later in the NY session. US initial jobless claims are expected to rise from 323K to 300K, and any further increase in claims can cause more downside for the US dollar. Other than this ECB President Mario Draghi will be speaking later in the European session, and can bring in volatility for Euro crosses. Last time he was very cautious and dovish regarding his remarks about the economy, which caused EURUSD to move lower. It would be interesting to watch his speech today.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, GBPUSD, EURAUD, NZDJPY, GBPCHF, GOLD, SILVER, DOW JONES and S&P500.
Get it HERE: Vladimir’s Markets Forecast

Trade carefully friends. Happy trading!