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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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