Sold from 1.2970 following retest of 1.30...
Weekly gain/loss: - 303 pips
Weekly closing price: 1.2962
The USD/CAD suffered a nasty decline in value last week, losing over 300 pips in the process! Consequent to this, weekly price is now trading beneath the 1.3006-1.3115 area, which was a respected area of support. Worryingly for the bulls on the weekly timeframe is that the the next area of interest is a weekly support level coming in at 1.2538. By the same token, the daily timeframe also shows room to move down to at least the demand base drawn from 1.2822-1.2883.
Recent trading on the H4 timeframe shows us that the large psychological number 1.30 was taken out and then later retested as a resistance on Friday. There are two things we like here:
1. Not only is there room seen for the pair to trade lower on the higher timeframes, but there is also space for a move lower on the H4 timeframe down to demand penciled in at 1.2910-1.2923.
2. Friday’s closing candle is, in our humble opinion, a signal to suggest that the bears will now look to take things lower.
Our suggestions: With the above two points in mind, our team has taken a small short position at 1.2970 with a stop-loss order positioned above 1.30 at 1.3005 (a 35-pip stop). The initial target is the aforementioned H4 demand. So, this gives a 47-pip target – nearly 1.5 times our risk.
Data points to consider: US ISM manufacturing PMI at 3pm GMT+1.
Weekly closing price: 1.2962
The USD/CAD suffered a nasty decline in value last week, losing over 300 pips in the process! Consequent to this, weekly price is now trading beneath the 1.3006-1.3115 area, which was a respected area of support. Worryingly for the bulls on the weekly timeframe is that the the next area of interest is a weekly support level coming in at 1.2538. By the same token, the daily timeframe also shows room to move down to at least the demand base drawn from 1.2822-1.2883.
Recent trading on the H4 timeframe shows us that the large psychological number 1.30 was taken out and then later retested as a resistance on Friday. There are two things we like here:
1. Not only is there room seen for the pair to trade lower on the higher timeframes, but there is also space for a move lower on the H4 timeframe down to demand penciled in at 1.2910-1.2923.
2. Friday’s closing candle is, in our humble opinion, a signal to suggest that the bears will now look to take things lower.
Our suggestions: With the above two points in mind, our team has taken a small short position at 1.2970 with a stop-loss order positioned above 1.30 at 1.3005 (a 35-pip stop). The initial target is the aforementioned H4 demand. So, this gives a 47-pip target – nearly 1.5 times our risk.
Data points to consider: US ISM manufacturing PMI at 3pm GMT+1.
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