USDCAD - Being Patient with BOC Rate Statement
The impulsive drop on USDCAD seems to have started with the weakening of US Dollar, and the hawkish sentiment from BOC recently.
Looking at how price has developed, I will remain bearish on this pair for the remaining of 2017. However, I would prefer to be patient and wait for a decent correction towards 1.3122 before looking for a short opportunity again. Next week BOC Rate Statement might come in as anticipated and might give us the necessary correction.
Here are 3 reasons for me to avoid shorting this pair immediately -
1) Price has met the minimum criteria fibonacci ratio for a 3rd wave down. This give us the expectation of seeing a wave 4 correction before another move lower.
2) We are seeing a RSI divergence forming. This show us that the bearish strength might have subsided and a correction is near.
3) On the hourly timeframe, we are seeing a potential expanding diagonal structure forming. This technical pattern is a reversal pattern and thus we believe the higher probability direction is to the upside - a very short term one though.
So my trade plan next week?
BE PATIENT WITH THE BOC RATE STATEMENT.
**Definitely keeping a close watch on how price develop next week.
Looking at how price has developed, I will remain bearish on this pair for the remaining of 2017. However, I would prefer to be patient and wait for a decent correction towards 1.3122 before looking for a short opportunity again. Next week BOC Rate Statement might come in as anticipated and might give us the necessary correction.
Here are 3 reasons for me to avoid shorting this pair immediately -
1) Price has met the minimum criteria fibonacci ratio for a 3rd wave down. This give us the expectation of seeing a wave 4 correction before another move lower.
2) We are seeing a RSI divergence forming. This show us that the bearish strength might have subsided and a correction is near.
3) On the hourly timeframe, we are seeing a potential expanding diagonal structure forming. This technical pattern is a reversal pattern and thus we believe the higher probability direction is to the upside - a very short term one though.
So my trade plan next week?
BE PATIENT WITH THE BOC RATE STATEMENT.
**Definitely keeping a close watch on how price develop next week.