LiteForex - Analytics

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    Analytical review of the currency pair USD/CAD on 10.03.2016

    USD/CAD

    Technical data of the currency pair:

    Previous closing: 1.3247;
    Daily range: 1.3237-1.3283;
    Opening: 1.3247;
    52- week range: 1.1916-1.4692;
    Annual revenue: 4.56%;
    Change in % for the previous day: -1.19.


    Analytical review:

    • The Canadian dollar continues to strengthen positions against the USD. During yesterday’s session the price of the currency rose by 1.19%, exceeding support level of 1.3265.
    • As expected yesterday the Bank of Canada kept interest rate at the previous level of 0.5%. Executive of the Central Bank said that employment rate remained at the previous level and spending of the population supports demand.
    • The Canadian dollar is a commodity currency. Further rise in the CAD can be promoted by the rise in the price of oil. Since the mid February WTI oil has increased by 10 USD.
    • “Commitments of Traders’ shows that over 63% of large speculators believe in strength of the Canadian dollar. Long positions have increased by 6044 contracts.
    • News scheduled for release this week will include: speech of the head of the Bank of Canada (today), employment rate (on Friday). This information can affect dynamics and volatility in the market.

    Summary:

    • Since mid- February the Canadian dollar has significantly strengthened against the USD (over 600 points). In the near future Canadian Central bank will issue economic stimulus program. Possible correction in the commodity market support demand for the CAD. According to “COT” large investors believe that the CAD will strengthen.
    • Therefore, in the near future the CAD can strengthen against the USD. It is recommended to open short positions.

    Trading tips for the currency pair USD/CAD

    Medium- term trading:
    at the moment the currency has broken down support level of 1.3265. If the price maintains the levels of 1.3265-1.3295 and in case of respective confirmation (for example, a pattern Price Action), we recommend to open short positions. Risk per trade is not more than 2% of capital. Stop-order can be placed slightly above the signal line. Take profit should be placed in parts at the levels of 1.3210, 1.3160 and 1.3110 with the use of trailing stop.


    Short-term trading: At the moment the currency is traded in the range of 1.3235-1.3280. We recommend to enter the marker after breaking down and testing of this area. The positions can be opened near the signal line, and the nearest support/resistance levels. Risk per trade is not more than 3% of capital. Stop-order can be placed slightly above/below the signal line. Take profit should be placed in parts of по 50%, 30% and 20% with the use of trailing stop.



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