USD/CAD: general analysis
05 December 2019, 10:18
| Scenario | |
|---|---|
| Timeframe | Weekly |
| Recommendation | SELL |
| Entry Point | 1.3178 |
| Take Profit | 1.3060 |
| Stop Loss | 1.3260 |
| Key Levels | 1.3060, 1.3200, 1.3320, 1.3510 |
| Alternative scenario | |
|---|---|
| Recommendation | BUY STOP |
| Entry Point | 1.3320 |
| Take Profit | 1.3500 |
| Stop Loss | 1.3260 |
| Key Levels | 1.3060, 1.3200, 1.3320, 1.3510 |
Current trend
Constant tension in the US economic policy leads to the volatility of USD and sharp fluctuations in dollar pairs, including USD/CAD.
According to the US Federal Reserve representative, if the US and China do not reach an agreement in negotiations before December 15, trade duties on the remaining Chinese imports will take effect, which will hit the US economy and, accordingly, USD. CAD may be supported by today’s OPEC meeting results. If the plan to expand the existing reduction of 400,000 barrels per day is adopted, and the agreement is extended until June 2020, the currency will receive substantial support. The Bank of Canada’s decision to leave the rate at 1.75% will have the same effect.
Data on labor productivity came out slightly worse than expected and amounted to +0.2% against 0.1% last month. Analysts had expected more substantial growth, at least up to 0.8%. The pair may stay under pressure from a weakening USD and continue to decline.
Support and resistance
The global triangle pattern continues to evolve. Rebounded from the resistance line, the course began a dynamic downward movement, which may reach the level of 1.3000 this week. The Alligator indicator begins to reverse, which increases the likelihood of a further decline.
Support levels: 1.3200, 1.3060.
Resistance levels: 1.3320, 1.3510.
Trading tips
If the decline continues and the price stays below the local minimum at 1.3200, it is important to open sell positions at the current price with a target at 1.3060. Stop loss is beyond the local maximum of 1.3260.
After the asset growth and price fixing above a local maximum around 1.3320, buy positions with the target at 1.3500 will be relevant. Stop loss is below the local maximum, around 1.3260.
Implementation period: 7 days or more.
Constant tension in the US economic policy leads to the volatility of USD and sharp fluctuations in dollar pairs, including USD/CAD.
According to the US Federal Reserve representative, if the US and China do not reach an agreement in negotiations before December 15, trade duties on the remaining Chinese imports will take effect, which will hit the US economy and, accordingly, USD. CAD may be supported by today’s OPEC meeting results. If the plan to expand the existing reduction of 400,000 barrels per day is adopted, and the agreement is extended until June 2020, the currency will receive substantial support. The Bank of Canada’s decision to leave the rate at 1.75% will have the same effect.
Data on labor productivity came out slightly worse than expected and amounted to +0.2% against 0.1% last month. Analysts had expected more substantial growth, at least up to 0.8%. The pair may stay under pressure from a weakening USD and continue to decline.
Support and resistance
The global triangle pattern continues to evolve. Rebounded from the resistance line, the course began a dynamic downward movement, which may reach the level of 1.3000 this week. The Alligator indicator begins to reverse, which increases the likelihood of a further decline.
Support levels: 1.3200, 1.3060.
Resistance levels: 1.3320, 1.3510.
Trading tips
If the decline continues and the price stays below the local minimum at 1.3200, it is important to open sell positions at the current price with a target at 1.3060. Stop loss is beyond the local maximum of 1.3260.
After the asset growth and price fixing above a local maximum around 1.3320, buy positions with the target at 1.3500 will be relevant. Stop loss is below the local maximum, around 1.3260.
Implementation period: 7 days or more.
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