USDCAD to build further upside momentum in the short term

The Canadian dollar has corrected some of the recent losses, as USDCAD has been moving lower for the last couple of days. However, I think the bullish cycle for the pair is not over, and it might continue to trade higher in the coming sessions/days. There is a bullish divergence forming on the 4 hour chart. There is a trend line waiting on the downside along with several supports, as highlighted in the chart below. So, if the pair moves a bit lower, stops around the support levels and creates a divergence on the lower timeframe, then we can enter into a buy trade.

Alternatively, there is a down-move trend line forming on the hourly chart. There is also a resistance at around the 1.1190 level. If the pair breaks the trend line and resistance zone and closes above it, then also we can enter into a buy trade. Remember, wait for a confirmation of break before taking a position.

Initial target should be around 1.1280 level, and final target could be above 1.1320 level. Stop should be placed below the 20 day moving average in the first scenario, and below the broken trend line in the second scenario.

German Ifo business climate index and UK CPI
Yesterday, the German Ifo business climate index and UK CPI figures were published in the European session. The German Ifo business climate index registered a decline from 113.3 to 110.7, which caused the EURUSD to slide a bit. Later, the UK CPI figures were released, which were mostly in line with the expectations, and as a result the GBPUSD traded mostly in a range. However, during the NY session, the US new home sales data and CB consumer confidence data ignited a rally in both the pairs. Moreover, the positive comments from the Draghi also pushed the EURUSD pair higher.

US Core durable goods orders and NZ trade data
Today in the NY session, the US core durable goods orders data will be published, which is expected to decline. If the outcome surprises to the upside, then one can expect the US dollar to recover some ground intraday. On the other hand, if orders fell more than expected, then the US dollar could take a hit. Later, during the next Asian session, the New Zealand imports, exports and trade balance figures will be released. Now, considering the NZDUSD is trading at higher levels this release can play a crucial role in the short term for the pair. So, keep an eye on this event.

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

Trade safe friends. Happy trading!