The USDCAD is displaying 2/3 market structure. There are only 3 ways markets move: uptrend, range and downtrend. These are composed of swings in the case of uptrend and downtrends.
The USDCAD has been in an uptrend, composed of higher lows and higher highs. We then began to exhaust as no new higher lows and higher highs were created. We are now in a range.
Price exhausted near a resistance/flip zone of 1.3340, however I would prefer to see price test a bit closer. This would be one downfall for this idea.
But the market structure is there.
We are creating an exhaustion/topping pattern. With a break of 1.3260, we would break below a flip zone.
This is what I am watching for. There is a demand zone at 1.3100 that should be a take profit zone.
We do have the Bank of Canada this week on Wednesday. Many are expecting Canada to hold interest rates steady at 1.75% but Canada is not immune to the global slowdown. They will eventually cut rates.
I must say that perhaps we could get a surprise cut. The rest of the world is cutting rates, and Canada is equal to the US in terms of rates.
I do expect a dovish tone, which could see USDCAD test the aforementioned 1.3340 flip zone.
Again, we will not be doing anything until the flip zone is broken which would give us the trigger to enter. Until then we remain on the sidelines.
The USDCAD has been in an uptrend, composed of higher lows and higher highs. We then began to exhaust as no new higher lows and higher highs were created. We are now in a range.
Price exhausted near a resistance/flip zone of 1.3340, however I would prefer to see price test a bit closer. This would be one downfall for this idea.
But the market structure is there.
We are creating an exhaustion/topping pattern. With a break of 1.3260, we would break below a flip zone.
This is what I am watching for. There is a demand zone at 1.3100 that should be a take profit zone.
We do have the Bank of Canada this week on Wednesday. Many are expecting Canada to hold interest rates steady at 1.75% but Canada is not immune to the global slowdown. They will eventually cut rates.
I must say that perhaps we could get a surprise cut. The rest of the world is cutting rates, and Canada is equal to the US in terms of rates.
I do expect a dovish tone, which could see USDCAD test the aforementioned 1.3340 flip zone.
Again, we will not be doing anything until the flip zone is broken which would give us the trigger to enter. Until then we remain on the sidelines.