Trading ideas for currency pair: USD/CAD broke the upper limit of the triangle. Expect the Canadian to grow: first target 1.2798; second target 1.3022. Growth will cease after a break through the lower 1.2351 limit.
Since 2nd February of this year, the USD/CAD pair has been forming a triangle with a complicated wave structure. By the end of Friday trading the US dollar had broken the upper limit of the formation following the release of strong data on the American labor market.
February non-farm payroll employment in the US increased by 295,000 compared to a forecasted 240,000 increase. The January values for this indicator were reassessed from 257,000 to 239,000. The unemployment level dropped from 5.7% to 5.5%, whilst it was forecasted to be 5.6%. The average hourly wage increased by 0.1%, although forecasted to be 0.2%, previous 0.5%.
The last time the Bank of Canada convened to discuss its monetary policy, it decided to keep interest rates at 0.75%. Traders reacted by purchasing Canadian dollars, but by Thursday, the bulls had fought back and by Friday the pair had grown to 1.2621.
On Monday the market often goes against Friday, so it’s necessary to keep an eye on the Canadian dollar on Tuesday. We can expect the USD/CAD rate to move northward to 1.2798, and later to 1.3022, after a break in the upper limit.
Note the USD/CAD pair’s correction when the price of Brent broke the 50 dollar mark. A barrel of Brent now costs 59.77. If oil goes up to 65 dollars, USD/CAD growth will slow.
According to the AC indicator, three mounting bases are being formed in the negative area. The AO indicator has been unloading from 0.624 to the zero line. The CCI has entered the >+100 zone. Technical signals are indicating that growth will continue in the coming month.
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