USD/CAD: the US dollar is dropping
28 January 2019, 09:33
| Scenario | |
|---|---|
| Timeframe | Intraday |
| Recommendation | BUY STOP |
| Entry Point | 1.3225, 1.3250 |
| Take Profit | 1.3374 |
| Stop Loss | 1.3200 |
| Key Levels | 1.3100, 1.3140, 1.3179, 1.3200, 1.3247, 1.3322, 1.3374, 1.3419 |
| Alternative scenario | |
|---|---|
| Recommendation | SELL STOP |
| Entry Point | 1.3195 |
| Take Profit | 1.3140, 1.3100 |
| Stop Loss | 1.3247 |
| Key Levels | 1.3100, 1.3140, 1.3179, 1.3200, 1.3247, 1.3322, 1.3374, 1.3419 |
Current trend
USD showed steady decline against CAD on Friday, having updated local lows of January 11.
Investors are focused on the US government shutdown and the US-Chinese trade negotiations. On Friday, President Donald Trump made concessions and signed a temporary budget without financing the wall on the Mexican border. However, the President warned that if there is no compromise in the government, after 21 days the situation may happen again.
On Friday, US Commerce Secretary, Wilbur Ross, said that the US and the PRC are still far from the deal, which is understandable due to a number of problems between the two countries. In addition to the significant deficit of the US budget in the trade with China, there is the issue of access of American companies to the Chinese market and protection of their intellectual property. Ross did not deny the possibility of extending the truce after March 1.
Support and resistance
Bollinger Bands in D1 chart demonstrate flat dynamics. The price range consolidated in fairly spacious boundaries corresponding to the observed dynamics. MACD is declining keeping a weak sell signal (located below the signal line). Stochastic shows similar dynamics but is approaching its lows, which indicates the risks of the oversold USD in the ultra-short term.
One should keep existing short positions in the short and/or ultra-short term until the situation is clear.
Resistance levels: 1.3247, 1.3322, 1.3374, 1.3419.
Support levels: 1.3200, 1.3179, 1.3140, 1.3100.
Trading tips
To open long positions, one can rely on the rebound from 1.3200 with the subsequent breakout of 1.3220 or 1.3247. Take profit — 1.3374. Stop loss — 1.3200. Implementation period: 2-3 days.
A breakdown of 1.3200 may be a signal to further sales with target at 1.3140 or 1.3100. Stop loss — 1.3247. Implementation period: 1-2 days.
USD showed steady decline against CAD on Friday, having updated local lows of January 11.
Investors are focused on the US government shutdown and the US-Chinese trade negotiations. On Friday, President Donald Trump made concessions and signed a temporary budget without financing the wall on the Mexican border. However, the President warned that if there is no compromise in the government, after 21 days the situation may happen again.
On Friday, US Commerce Secretary, Wilbur Ross, said that the US and the PRC are still far from the deal, which is understandable due to a number of problems between the two countries. In addition to the significant deficit of the US budget in the trade with China, there is the issue of access of American companies to the Chinese market and protection of their intellectual property. Ross did not deny the possibility of extending the truce after March 1.
Support and resistance
Bollinger Bands in D1 chart demonstrate flat dynamics. The price range consolidated in fairly spacious boundaries corresponding to the observed dynamics. MACD is declining keeping a weak sell signal (located below the signal line). Stochastic shows similar dynamics but is approaching its lows, which indicates the risks of the oversold USD in the ultra-short term.
One should keep existing short positions in the short and/or ultra-short term until the situation is clear.
Resistance levels: 1.3247, 1.3322, 1.3374, 1.3419.
Support levels: 1.3200, 1.3179, 1.3140, 1.3100.
Trading tips
To open long positions, one can rely on the rebound from 1.3200 with the subsequent breakout of 1.3220 or 1.3247. Take profit — 1.3374. Stop loss — 1.3200. Implementation period: 2-3 days.
A breakdown of 1.3200 may be a signal to further sales with target at 1.3140 or 1.3100. Stop loss — 1.3247. Implementation period: 1-2 days.
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