USD/CAD: the instrument is consolidating
05 February 2019, 09:49
| Scenario | |
|---|---|
| Timeframe | Intraday |
| Recommendation | BUY STOP |
| Entry Point | 1.3170 |
| Take Profit | 1.3300, 1.3322 |
| Stop Loss | 1.3100 |
| Key Levels | 1.2950, 1.3000, 1.3067, 1.3100, 1.3164, 1.3200, 1.3247, 1.3322 |
| Alternative scenario | |
|---|---|
| Recommendation | SELL STOP |
| Entry Point | 1.3095, 1.3060 |
| Take Profit | 1.3000, 1.2950 |
| Stop Loss | 1.3120, 1.3150 |
| Key Levels | 1.2950, 1.3000, 1.3067, 1.3100, 1.3164, 1.3200, 1.3247, 1.3322 |
Current trend
Yesterday, USD strengthened slightly against CAD, interrupting a series of declines, which led to an update in local lows since November 7.
USD is supported by positive data from the labor market, in particular, by employment growth by 296K, which significantly exceeded market expectations. In addition, it is strengthened by the comments of US President Donald Trump, who in an interview with CBS confirmed that trade negotiations with China are going well and that in the near future there is an opportunity to conclude a disarmament deal with North Korea. Trump and Kim Jong-un meeting can be held in Vietnam in mid-February.
Yesterday’s dynamics of production orders in the United States did not support the instrument. In November, the figure fell by 0.6% MoM after a decrease of 2.1% MoM in October. Analysts assumed growth of +0.2% MoM.
Support and resistance
On the daily chart, Bollinger bands are steadily declining. The price range is widening, letting the “bears” renew local lows. MACD indicator slowed down a bit but still maintains a fairly strong sell signal (the histogram is below the signal line). Stochastic, located in close proximity to its lows, is trying to reverse upwards.
The appearance of correctional dynamics in the short and/or super short term is possible.
Resistance levels: 1.3164, 1.3200, 1.3247, 1.3322.
Support levels: 1.3100, 1.3067, 1.3000, 1.2950.
Trading tips
Long positions can be opened after the breakout of 1.3164 with the targets at 1.3300–1.3322. It is reasonable to place stop loss no further than 1.3100. Implementation period: 2–3 days.
Short positions can be opened after the breakdown of the level of 1.3100 or 1.3067 with the target of 1.3000 or 1.2950. Stop loss is 1.3120–1.3150. Implementation period: 1–2 days.
Yesterday, USD strengthened slightly against CAD, interrupting a series of declines, which led to an update in local lows since November 7.
USD is supported by positive data from the labor market, in particular, by employment growth by 296K, which significantly exceeded market expectations. In addition, it is strengthened by the comments of US President Donald Trump, who in an interview with CBS confirmed that trade negotiations with China are going well and that in the near future there is an opportunity to conclude a disarmament deal with North Korea. Trump and Kim Jong-un meeting can be held in Vietnam in mid-February.
Yesterday’s dynamics of production orders in the United States did not support the instrument. In November, the figure fell by 0.6% MoM after a decrease of 2.1% MoM in October. Analysts assumed growth of +0.2% MoM.
Support and resistance
On the daily chart, Bollinger bands are steadily declining. The price range is widening, letting the “bears” renew local lows. MACD indicator slowed down a bit but still maintains a fairly strong sell signal (the histogram is below the signal line). Stochastic, located in close proximity to its lows, is trying to reverse upwards.
The appearance of correctional dynamics in the short and/or super short term is possible.
Resistance levels: 1.3164, 1.3200, 1.3247, 1.3322.
Support levels: 1.3100, 1.3067, 1.3000, 1.2950.
Trading tips
Long positions can be opened after the breakout of 1.3164 with the targets at 1.3300–1.3322. It is reasonable to place stop loss no further than 1.3100. Implementation period: 2–3 days.
Short positions can be opened after the breakdown of the level of 1.3100 or 1.3067 with the target of 1.3000 or 1.2950. Stop loss is 1.3120–1.3150. Implementation period: 1–2 days.
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