LiteForex - Analytics

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    Analytical review of the currency pair USD/CAD on 16.02.2016

    USD/CAD

    Technical data of the currency pair:

    Previous closing: 1.3839;
    Daily range: 1.3739-1.3842;
    Opening: 1.3839;
    52-week range: 1.1916-1.4692;
    Annual revenue: 10.68%;
    Change in % for the previous day: -0.11.


    Analytical review:

    • Since mid-January 2016the Canadian dollar has significantly strengthened against the USD. Over the past 3 weeks the currency has gained over 900 points.
    • CAD hardly responds to the improvements in market sentiments and positive US economic statistics.
    • CAD is a commodity currency. On Monday oil continues correction after 12% rise last Friday caused by the expectations that OPEC would be able to agree on reduction of oil production in order to decrease surplus.
    • “Commitments of Traders” shows that over 64% of large speculators believe that CAD is a strong currency. There are 114262 for long positions and 53649 contracts for short positions.
    • Some important news will be released this week, including minutes of FOMC meeting (Wednesday) and crude oil inventories (Thursday). This information can affect movement direction and volatility in the market.

    Summary:

    • Over the last 3 week the Canadian dollar has strengthened its positions. The currency hardly responds to the US macro-economic data. Possible correction in the commodity market can cause the rise in CAD. According to “COT” large investors believe that CAD will grow.
    • In the near future CAD is likely to grow versus the USD. We recommend to enter the market with short positions.

    Trading tips for the currency pair USD/CAD

    Medium-term trading:
    currently, the currency has broken down and consolidated below support level of 1.3800. In case of testing of the “reflected” resistance level of 1.3800 and respective confirmation (for example Price Action), we recommend to open short positions. Risk per trade is not more than 1.5% of the capital. Stop-order can be placed slightly above the signal line. Take profit should be placed in parts at the levels of 1.3730, 1.3650 and 1.3600 with the use of trailing stop.


    Short-term trading: at the moment the currency has exceeded local support level of 1.3750. After testing of the resistance level of 1.3765 and in case of the respective confirmation 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 1.3780. Take profit should be placed at the levels of 1.3730, 1.3705 and 1.3680 with the use of trailing stop.



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