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Short-term Trading Idea FX USD/CAD – Bull Speculation: Following Correction, Expect New Growth

Trading opportunities for currency pair: the USD/CAD rate grew by 61.8% from a fall from 1.2834 to 1.1919. Over the course of Thursday and Friday, two pinbars formed, indicating a correction to the support zone of 1.2351-1.2400. After a dip, expect a rise with a target of 1.2666 (10th April maximum).

Over the course of 2 weeks the USD/CAD reached 1.2537 (+522) from 1.2015. The idea from 18th May came off as a result of the dollar’s rally and a fall in oil quotes. No recoil. The dollar rate slid by 61.8% from 1.2834 to 1.1919.

I decided to look at this pair again today. On Friday some weak GDP data from Canada and the USA came out. American GDP fell by 0.7% over the first quarter (forecasted -0.8%) Canadian GDP fell by a quarterly rate of 0.1% and by 0.6% yearly.

In this idea I’m considering at two scenarios. The first is a slide to the 1.2350-1.2325 zone. Have a look: on the daily 2 pinbars have formed with a range of 116 points for the both of them. The 1.2351-1.2325 resistance zone was successfully broken on Wednesday. It’s now a support. I’m sure that, before a new USD/CAD growth upwards, its solidity will be tested.

The second scenario is something more standard: growth of the pair with a target of 1.2666 (10th April maximum) after a dip. I reckon it’s worth catching the dollar on the way down, getting it at around 1.2350/20. Buy when all the boxes are ticked in terms of signals and keep an eye on the movement of oil prices. Daily indicators are set up in such a way that a correction could see the dollar dipping as low as 1.2080.

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Forecasts which are made in the review constitute the personal view of the author. Commentaries made do not constitute trade recommendations or guidance for working on financial markets. Alpari bears no responsibility whatsoever for any possible losses (or other forms of damage), whether direct or indirect, which may occur in case of using material published in the review.

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