Analytical Review of the Currency Pair USD/CAD

Analytical Review of the Currency Pair USD/CAD

11 April 2016, 21:24
Roberto Jacobs
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Analytical Review of the Currency Pair USD/CAD

Technical data of the currency pair:

Previous closing: 1.2979; Daily range: 1.2971-1.3014;
Opening: 1.2986; 52- week range: 1.1916-1.4692;
Annual revenue: +3.49%; Change in % for the previous day: -1.26;

Analytical review:

  • Over the last three trading sessions the currency has traded in the range of 1.3025-1.3185. During trading session last Friday the CAD had broken out the lower limit of the range (1.3025) and increased in price by over 150 points;
  • Important Canadian statistics was released last week, showing that construction permits rose by 15.5% in February, against the forecast of 4.8%;
  • The CAD is a commodity currency. Demand for the CAD is supported by the rise in oil prices. Last week crude oil WTI rose by over 5 USD;
  • “Commitments of Traders” shows significant increase in number of short positions by 8664 up to 60825 contracts;
  • This week’s news will interest rate decision by the Bank of Canada (Wednesday) and US core consumer price index (Thursday). This data may affect market volatility.


Summary:

  • In the past 2 months the CAD has significantly grown against the USD (over 1000 points). Positive Canadian economic statistics and the rise in oil prices caused the rise in demand in CAD. According to “COT” large investors increased short positions.
  • It is expected that in the near future the CAD will grow against the USD. We recommend to open short positions.


Trading tips for the currency pair USD/CAD

Medium-term trading: At the moment the currency is traded in the range of 1.3000-1.3025. If the price maintains and tests these levels 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 at the level of 1.3040. Take profit can be placed in parts at the levels of 1.2940, 1.2880 and 1.2840 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 1.2970-1.3020. We recommend to enter the market after breaking out and testing of this zone. Positions should be opened at the signal line and the nearest support/resistance level. Risk per trade is not more than 3% of capital. Stop order can be placed slightly above/below the signal line. Take profit can be placed in parts of 50%, 30% and 20% 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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