LiteForex - Analytics

    LiteForex

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    Analytical review for USD/CAD as of 07.06.2016

    Technical performance:

    Prev. closure: 1.2816;
    Daily range: 1.2801-1.2840;
    Opening: 1.2816;
    52-week range: 1.2124-1.4692;
    Annual profit: 5.03%;
    Previous day's change (%): -1.10.

    Analytical review:

    • In the past 2 days the Canadian dollar has significantly grown in price against the US dollar (by over 250 points). At yesterday's trading session the pair USD/CAD dropped 1.10%;
    • US Fed Head's comments at yesterday's press conference did not revive demand for the American dollar. Fed Head announced an eventual interest rate hike but did not specify an exact time;
    • The Canadian dollar belongs to commodity currencies, and the demand is supported by positive oil price statistics. WTI oil has grown by over 4 USD since mid-May;
    • The Commitments of Traders Report shows that important market operators have decreased the number of their long positions by 2122 contracts to 64353 contracts. The number of short positions amounts to 94264 contracts;
    • Canadian economy news is worth attention this week: Ivey PMI publication (today) and Bank of Canada Governor's statement (Thursday). These events may affect market volatility.

    Summary:

    • US labour market weakness, lower expectations of an eventual rate rise by Fed at June's meeting and oil quotes growth support demand for the Canadian dollar. According to the Commitments of Traders Report, important operators have reduced their long positions;
    • So, we expect that the CAD will consolidate against the USD in the nearest future. We advise you to search for market entry points to open short positions.

    Trading tips for USD/CAD

    Key levels:
    Support levels: 1.2800, 1.2690, 1.2595
    Resistance levels: 1.2910, 1.3015

    Medium-term trading, H4
    The currency is currently trading near a support level at 1280.00. Once this level is broken and tested and relevant confirming signals appear (Price Action patterns, for example), we recommend searching for market entry points to open short positions. Risk per trade: no more than 2% of equity. Stop order shall be placed a bit above the signal line. We recommend that prospective profits should be fixed partly at the levels of 1.2710, 1.2630 and 1.2550, with Trailing Stop applied.

    Medium-term trading, H4
    Medium-term trading, H4

    Short-term trading, M15
    The currency is trading at 1.2800-1.2835. We advise you to search for market entry points once this zone is broken and tested. Positions shall be opened in the direction of the signal line and the nearest support/resistance level. Risk per trade: no more than 3% of equity. Stop order shall be placed a bit above/below the signal line. Prospective profits shall be fixed partly, at 50%, 30%, and 20% of a prospective fluctuation, with Trailing Stop applied.

    Short-term trading, M15
    Short-term trading, M15


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