The PA on the monthly chart is headed up, but the daily bars are in a downtrend channel. So, what is its direction?
The pair is hovering for now on the top of two mid-trendlines: the daily and the weekly. It is visible on the chart that it made two attempts to cross the weekly mid-trendline and there are no clues it won't do it again and perhaps succeed. A second key element that drives us to believe that the pair is headed south is the fact that it tried three times to cross a key resistance trendline that is plotted on the yearly chart (the violet one). While a third key element is the downtrend channel that the PA plotted on the 4h chart (the orange one).
USA and Canada are two strong economies where both FED and BOC* are increasing the interest rate. One country is 'exiting' international treaties with Trump leading the battalion while the other one is siding more and more with EU and its allies. The GDP growth rate QoQ is to be released this week and the forecast is positive for both. Though the US data will weigh a lot more and so influence traders' decision. Flash news to cause again short-lived runs.
It is a tricky situation to decide whether the CAD will be stronger than the USD or not. Our goal, however, is to have a detached approach and to conclude that if there is a downtrend then shorting is not a bad idea, after all, if the price leaves the channel we can switch sides.
The pair is hovering for now on the top of two mid-trendlines: the daily and the weekly. It is visible on the chart that it made two attempts to cross the weekly mid-trendline and there are no clues it won't do it again and perhaps succeed. A second key element that drives us to believe that the pair is headed south is the fact that it tried three times to cross a key resistance trendline that is plotted on the yearly chart (the violet one). While a third key element is the downtrend channel that the PA plotted on the 4h chart (the orange one).
USA and Canada are two strong economies where both FED and BOC* are increasing the interest rate. One country is 'exiting' international treaties with Trump leading the battalion while the other one is siding more and more with EU and its allies. The GDP growth rate QoQ is to be released this week and the forecast is positive for both. Though the US data will weigh a lot more and so influence traders' decision. Flash news to cause again short-lived runs.
It is a tricky situation to decide whether the CAD will be stronger than the USD or not. Our goal, however, is to have a detached approach and to conclude that if there is a downtrend then shorting is not a bad idea, after all, if the price leaves the channel we can switch sides.
Comment:
The moment I plotted the trendlines in the MT4 app, I realized that the price has reached the lower limit of the weekly channel. The pair is at a crossroads!
Trade active:
The price is headed to 1.2900 which is a good area to TP some of our orders. The bottom could be 50 pips lower (see lower limit of the orange channel).
Trade active:
The price might make a turn now and head towards the upper limit of the channel.
Trade active:
The price made a serious breakout of the downtrend channel, it is unclear where it is headed in the long run, but perhaps it visits 1.2900
Trade active:
The price hit the violet trendline once again giving traders a chance to short safely until 1.3060 which will be our TP1.
Trade active:
The price did not move down but made a breakout and reached the upper limit of the weekly uptrend channel.
