Market is not moving much and staying calm this week, and I think today can also be a quiet day. Today, we will talk about USDCAD, which I think can present a sell opportunity in short term. The pair is forming a bearish convergence on the daily chart as shown below.
On the 4 hour chart, USDCAD is forming a continuing divergence as well, which suggest that we should be looking for sell opportunities. There can be two ways to enter a sell trade. First trade a break of 1.0280 level. If the pair breaks the support and manages to settle below it, then we will enter a sell trade for USDCAD.
Alternatively, we can look to sell rallies in USDCAD. If the pair pushes to the upside, closes the gap and forms a divergence on the 4 hour chart, then also we can jump into a trade with a bearish candle pattern on the 1 hour chart. Initial target should be around 1.0220 and final target could be around the last low of 1.0180. Stop should be placed above 1.0330 in first case and above 200 moving average on the 4 hour chart for the second case.
Reviewing yesterday’s events and trades
There were two major events scheduled yesterday, UK and US GDP data. Fundamental data from the UK failed to impress the investors as there was no upside revision in GDP, Business Investment missed expectations and fell sharply to register a loss of -2.7% and Current account posted a deficit of -13.0B. Overall data was poor, which pushed GBPUSD to the daily lows at around 1.6000. US GDP too missed expectations and posted a growth rate of 2.5%. However, US initial jobless claims fell to six-year low of 305K, which boosted the US dollar.
Fundamental Outlook for the day
Today, ECB President Draghi will be speaking and considering EURUSD is consolidating in a range I think we can see some volatility in this particular period. German Inflation data is also scheduled later in the European session, which is expected to remain stable. Other than this, Michigan consumer sentiment is also scheduled in the US session and is expected to improve from the last reading of 76.8. FOMC members Rosengren and Dudley will be speaking about the fed policies later in the day. I do not expect any major movements in the market and would like to stay away if opportunities do not arise.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURGBP, EURJPY, AUDCAD, AUDNZD, EURNZD, DOW JONES and NZDJPY.
Get it HERE: Vladimir’s Markets Forecast
Happy Weekend friends. Enjoy!
