USD/CAD: How to trade the next week (Aug 17-21)
Hi traders, here's an update on USD/CAD and how to trade the pair the next trading week.
TECHNICALS:
USD/CAD has been in a strong downtrend on the daily chart after respecting a long-term falling trendline and after higher oil prices supported the Canadian dollar in the last few weeks.
The pair is now completing a correction, which can be seen on the 1-hour chart, where the price came near a horizontal resistance level and a Fib-based resistance zone between the 38.2% and 50% levels. Those levels could provide some selling pressure and resume the daily downtrend.
Zooming in further, the 15-min chart shows a bearish wedge pattern, where a break below the lower wedge support (around 1.3240-45), could accelerate a down-move and provide and selling opportunity. There's no confirmed setup until the pair triggers the wedge pattern.
A break below the wedge would target the recent lows, with an SL just above the recent H1 swing high.
POSITIONING:
Bearish positioning in the CAD increased in the previous week among all market participants (reported by the CFTC). However, positioning in the USD index remains bearish as well, except among dealers. Open interest is negative for both currencies. Positioning is overall neutral for the pair.
CORRELATIONS:
Interest rates and the price of Brent crude (inverted on the chart above) are more or less in-line with USD/CAD. The recent up-move in the pair was partly triggered by lower (ranging) oil prices, and interest rate differentials are somewhat supporting a weaker USD against the CAD.
== SUMMARY ==
My traders and I are waiting for a clear sell signal to enter a short position in USD/CAD.
Please hit the "LIKE" button if you find this post useful. Also, don't forget to follow to get more trade ideas like this. Thanks!
TECHNICALS:
USD/CAD has been in a strong downtrend on the daily chart after respecting a long-term falling trendline and after higher oil prices supported the Canadian dollar in the last few weeks.
The pair is now completing a correction, which can be seen on the 1-hour chart, where the price came near a horizontal resistance level and a Fib-based resistance zone between the 38.2% and 50% levels. Those levels could provide some selling pressure and resume the daily downtrend.
Zooming in further, the 15-min chart shows a bearish wedge pattern, where a break below the lower wedge support (around 1.3240-45), could accelerate a down-move and provide and selling opportunity. There's no confirmed setup until the pair triggers the wedge pattern.
A break below the wedge would target the recent lows, with an SL just above the recent H1 swing high.
POSITIONING:
Bearish positioning in the CAD increased in the previous week among all market participants (reported by the CFTC). However, positioning in the USD index remains bearish as well, except among dealers. Open interest is negative for both currencies. Positioning is overall neutral for the pair.
CORRELATIONS:
Interest rates and the price of Brent crude (inverted on the chart above) are more or less in-line with USD/CAD. The recent up-move in the pair was partly triggered by lower (ranging) oil prices, and interest rate differentials are somewhat supporting a weaker USD against the CAD.
== SUMMARY ==
My traders and I are waiting for a clear sell signal to enter a short position in USD/CAD.
Please hit the "LIKE" button if you find this post useful. Also, don't forget to follow to get more trade ideas like this. Thanks!
