USDCAD to extend the downside on a break of 1.1000

The Canadian dollar has recently lost some ground after setting a low at around the 1.0850 against the US dollar. The USDCAD pair is now trading back above the 1.1000 level. There is a bearish convergence formed on the daily chart, which suggests that the USDCAD pair might dive down again towards the last low. So, selling might be a good option in the short term.    

Looking at the 4 hour chart of USDCAD, there is a monster support at around the 1.1000 level. If the pair manages to break this support level, and closes below the same, then we can consider entering into a sell trade. Remember, we need the pair to close below the support level to avoid any false break trading.

Initial target should be around the 1.0900 level, and final target could be around the last low at 1.0850. Stop should be placed above the 1.1080 level.

Reviewing yesterday’s events and trades
Yesterday was a quiet trading day, as it was Easter Holiday. Most of the major currency pairs consolidated in a range throughout the day. Some of the major currency pairs like AUDUSD and NZDUSD are trading higher, as the CB leading index released for Australia came better than expected. EURUSD and GBPUSD are also trading a touch higher intraday, and challenging the range highs. Liquidity is expected to return in the London and NY session today.

Fundamental Outlook for the day
Today, during the NY session, the Canadian wholesale sales data was published along with the US existing home sales data. The outcome was on the positive side for the US, as the dollar gained bids during the NY session. Later, during the next Asian session, Australia’s CPI data and Chinese HSBC manufacturing PMI will be published, which can leave a strong impact on the risk sentiment. It would be interesting to see whether the risk gets a boost after the release or not.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: USDJPY, EURUSD, NZDUSD, AUDNZD, EURCHF, EURCAD, GOLD and OIL.
Get it HERE: Vladimir’s Markets Forecast

Trade safe friends. Happy trading!

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