This is not the best looking chart, however, what attracted me to this trade is the BoC
meeting on Wednesday, when a rate hike is widely expected. This is the time to put on a trade, when the risk reward is theoretically in your favor. The market fully priced in a rate hike from 0.50% to 0.75% from Poloz and co., and IMO the only danger to this trade is a very hawkish hike, however, how likely is that? The Canadian economy definitely showed signs of improvement recently, however, did anyone look at oil
lately? How hawkish can a hike be? This reminds me of the episode when the FED dropped the word 'patient'. What if the BoC
does not hike? Probably 2% to the upside in seconds.
Looking at the weekly chart, not much to say. Wider view - sideways market, zoom in a little - small uptrend, price standing at value.
The daily chart
is more interesting. A possible failed H&S
, with false breakouts, a small bullish divergence
on the MACD
histogram and a bullish
candle last week.
The 4H chart, where I do my timing, shows a big bullish divergence
on a double bottom
. However, no really bullish
candle yet, when I'll see that candle, I'll double up.
Soft stop below the swing low, no target though, because for me it matters how the BoC
meeting turns out. Depending on the outcome, my feelings/emotions and technical picture at that time, I will manage the position.
Same goes for USDCAD
, where I have a long position as well.