Nice short term buy opening in USDCAD (extract from Weekly Market Forecast 19th of October 2014)

The US dollar corrected lower against a basket of currencies, including the Canadian dollar. The USDCAD pair moved a bit lower, but it remained above an important support area. I think there is a chance of a retest of the last high or the pair might even create a new high. So, we should be looking for short-term buy opportunities as long as the pair stays in the bullish zone.

There is an important support trend line formed on the 4 hour chart of the USDCAD pair. There is also a critical support area around the 1.1220 levels, as can be seen in the chart below. If the pair manages to move a bit lower from the current levels, makes a stop and forms a divergence on the lower timeframe, then we can enter into a buy trade. Remember, the highlighted trend must be respected for this trade setup to be valid.

Initial target should be around the 1.1340 level, and final target could be around the 1.1380 level. Stop should be placed below the bullish trend line.

Major events scheduled in the upcoming week
The US dollar continued to move lower during this past week, and corrected further against the Euro, British pound and the Australian dollar. There were some key releases in the US, which missed the expectation of the market by a fair margin. This ignited a down-move in the US dollar, as the US dollar buyers got nervous and stepped aside. There were some sharp moves noted in the pairs like EURUSD, GBPUSD, AUDUSD and USDJPY. The main point here is that whether the US dollar will continue to move lower in the coming week or it would gain some strength. We need to only wait and monitor price action for this to decide.

Let us look at all major events lined up in the upcoming week.
Sunday – No economic release.

Monday – German PPI, Canadian wholesales data, RBA monetary minutes, Chinese industrial production and Chinese GDP data.

Tuesday – US existing home sales data, Japanese trade balance data and Australian CPI.

Wednesday –MPC meeting minutes, US CPI, Canadian retail sales, BOC interest rate decision, New Zealand CPI and Chinese HSBC manufacturing PMI.

Thursday – French manufacturing and services PMI, German manufacturing and services PMI, Euro zone manufacturing and services PMI, UK retail sales data, US initial jobless claims, US manufacturing PMI and New Zealand trade balance data.

Friday –UK GDP and US new home sales data.

This analysis is taken from Weekly Market Forecast, which also includes trade opportunities on: GBPCHF, EURGBP, USDJPY, EURJPY, GBPJPY, AUDUSD, NZDUSD, AUDNZD, EURAUD, USDCAD and AUDCAD.
Get it HERE: Vladimir’s Markets Forecast

Happy trading friends!

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