Analytical Review of the Currency Pair USD/CAD

Analytical Review of the Currency Pair USD/CAD

7 April 2016, 11:44
Roberto Jacobs
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Analytical Review of the Currency Pair USD/CAD

Technical data of the currency pair:

Previous closing: 1.3092; Daily range: 1.3024-1.3100;
Opening: 1.3092; 52- week range: 1.1916-1.4692;
Annual revenue: +4.55%; Change in % for the previous day: -0.45;

Analytical review:

  • Since the beginning of April the CAD has dropped by over 200 points against the SD. During yesterday’s trading session rally in the CAD was halted at the local resistance level of 1.3185;
  • Yesterday’s FOMC meeting has shown that executives of the US Fed do not have general opinion about further monetary policy tightening in the country;
  • Cad is a commodity currency. Demand for the currency is supported by economic data, released by the US Energy Information Administration (EIA), which showed that oil reserves in the USA fell by 4.94 million barrels last week;
  • “Commitments of Traders” shows the increase the number of short positions by 5160, up to 52161.
  • Economic data of this week will include a speech of the US Fed chairman (Friday) and changes in the employment rate in Canada (Friday) The news may affect dynamics and volatility in the market.


Summary:

  • During yesterday’s trading session the CAD has slightly corrected (by 0.45%) against the USD. Demand for the CAD is supported by the rise in oil prices in the last few sessions. The minutes of FOMC meeting shows that the US Fed executives are concerned about the state of the global economy and instability of the financial markets.
  • Market movement is mixed at the moment. We recommend to enter the market from the key support and resistance levels.


Trading tips for the currency pair USD/CAD

Medium-term trading: At the moment the currency has broken down and consolidated below the local support level of 1.3065. If the price maintains and tests mirrored resistance level of 1.3065 and in case of the respective confirmation (such as Price Action pattern), we recommend to open short positions. Risk per trade is not more than 2% of the capital. Stop order can be placed slightly above the signal line. Take profit can be placed in parts at the levels of 1.3010, 1.2935 and 1.2880 with the use of trailing stops.


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Short-term trading: on the chart with the timeframe 15M the currency is traded in the range of 1.3045-1.3070. If the price maintains this level we recommend to open short positions. Risk per trade is not more than 3% of capital. Stop order can be placed slightly above the signal line. Take profit can be placed in parts at the levels of 1.3010, 1.2980 and 1.2950 with the use of trailing stop.


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The material has been provided by LiteForex - Finance Services Company - www.liteforex.com


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