Here is a quick USDCAD update before the week ends. The pair is pushing its luck with a key resistance flying above the daily Ichimoku cloud.
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1- Fundamental Points
Oil: Saudi Arabia is talking oil up by hinting that the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries are considering an extension of its output cut deal.
Since the announcement brought more uncertainty than info, oil prices soon went back to their intraweek downtrends. This is important for USD/CAD because Canadian dollar is correlated to oil prices. When oil falls, so does Mr. CAD.
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Canada: Consumer Price Index (CPI) for March missed expectations today. But no change since Feb. Still, got Mr. CAD to drop.
U.S. and A: Flash Manufacturing PMI missed but Existing Home Sales came in green. US dollar is pretty mixed versus forex counterparts.
This brings us to the second point of IDDA: Technical analysis.
2- Technical Points: USDCAD Update
The USD/CAD pair formed a fresh bullish engulfing candlestick pattern. This was probably mostly thanks to the oil price drop. The pair is now testing above the key resistance level of 1.35. Also note that it has been trading above the daily Ichimoku cloud since March. But the cloud is flat. Last week we spotted a potential Double Top. It obviously didn’t pan out. So now we are waiting to see if this is going to turn into a Triple Top. Or a Quadruple Top. This can go on until the pair breaks the spell and and flies above 1.3577.
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USDCAD Update – Technical Analysis Daily Chart
3- Market Sentiment
Retail trader data shows 34.8% of traders were net-long the USD/CAD yesterday.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USDCAD prices may continue to rise.
Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger USD/CAD-bullish contrarian trading bias.
USDCAD Update – Strategy
Disclaimer: Forex is one of the HIGHEST risk investing instruments there is. For further help, please visit our investing group.
With regards to USDCAD investing strategy, as an Invest Diva you should be able to put the 3 and 4 together and develop a strategy suitable for your portfolio and risk tolerance at this time. For further help, and if you want to chat with me regarding your trades, join our investing group here. It’s awesome!!
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Here are Invest Diva’s calculations for important approximate levels for USDCHF to keep an eye on:
|Support Levels||Turning Point||Resistance Levels|