USDCAD to stage intraday correction lower if spot breaks 1.0950

Today, let us discuss about the USDCAD pair, and related trade opportunities. The pair has formed an important triangle, as can be seen in the daily chart shown below. Now, there are chances that the pair might move lower and break this triangle. Once it breaks the triangle and closes below it, then we can enter into a sell trade with a stop above the broken support zone.

Alternatively, one can also look to sell rallies in the pair. As mentioned in an analysis earlier, the pair did form a bearish divergence around the triangle resistance zone, and then moved lower. We can again wait for the pair to climb a bit higher from the current levels, and once the pair stops around the triangle resistance zone and creates a bearish divergence, then we can jump into a sell trade.

Initial target should be around the 1.1020 level, and final target could be around the triangle support area. Stop should be placed above the last high created.

Reviewing yesterday’s events and trades
Yesterday, in the European session, the Euro zone’s inflation data was published. The market was expecting the inflation to be around 0.8%. However, the annual inflation registered a 0.7% rate in February, missing the expectations by 0.1%. The EURUSD pair fell initially after the release, but later recovered all lost ground. Later, in the US session, the NY empire state manufacturing index was released, which missed the expectations of 6.00, and registered a reading of 5.61. The US dollar was seen trading lower after the data release.

Fundamental Outlook for the day
Today, there are some key events lined up in the NY session, including the US inflation data, housing starts figures, Treasury International Capital (TIC) Net Long-Term Transactions and US building permits data. These events can cause a lot of volatility in the market, so trade with caution around these events. We also have BOE Governor Mark Carney and BOC Governor Poloz speaking later during the day. One can anticipate swing moves around the time of speech, especially for the GBPUSD pair, as it has been trading in a range for quite some time now.

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

I wish everyone a great week ahead. Happy trading friends!