Hello Forex Traders!
USD strength seemed to be kicking back into the market slowly but surely and durig the GBP news release we saw the GBPUSD drop 100 pips, but a close reverse during the press conference of the Bank of Englad sent the GBP up across the board! Wow. I am going to let the dust (price) settle down a bit before diving into that one, so today we will be looking at the CAD.
Yesterday we discussed the potential for the Aussie to weaken against the Euro, but also versus the USD. That seems to be playing out well as we speak and I hope that we catch tons of pips on that trade.
The USDJPY bull flag pattern, which we reviewed on Monday, seems to be breaking to the downside in fact. Luckily I was anyhow waiting for a break of the top of the flag and was only willing to risk a wager at the sight of potential bullish candle sticks (didn’t happen). Waiting for confirmations can save a Forex trader from losses! The BOJ (Bank of Japan) will be releasing a statement and press conference so that is something to be aware of as it could influence the Yen currency.
For me, this week‘s Forex trading opportunities were mostly focused on the EURAUD long, AUDUSD short, AUDNZD short, EURCAD long, USDCAD long, CADCHF short. Check out our trading room here!
Let us take a look at the CAD and see what is going on with this currency. First of all the CAD has news releases at 8.30 am and 10am EST regarding the building permits and Ivey PMI. And on Friday August the 9th, the Bank of Canada will be releasing employment change and the unemployment rate figures.
From a technical point of view, the USDCAD and EURCAD have making nice upside movements after long drawn out consolidations, especially on the EURCAD.
USDCAD DAILY OPPORTUNITY
The USDCAD obviously is in a great up trend ever since the turn on the left dating back to mid September 2012. Here are the main items I believe are important:
1) Great trend channel on daily chart with good angle (close to 45 degree) and multiple hits on tops and bottoms. This trend channel is well established (green). If you dont know what the angle of the trend channel is important, then drop a note down below!
2) The move down recently bounced off the 786 Fibonacci retracement level when placing a Fib on the last move up.
3) The price moved back and bounced off the long-term moving average (green dotted).
4) The up move has broken the down side trend line (orange).
5) The oscillator is back to the 0 line, which indicates that the retracement has most likely been completed.
6) The oscillator bars are green, which indicates that the downside retracement is most likely over.
7) When comparing the bottoms, we are able to distuingish a higher low in price, but a lower low with the oscillator. This is known as hidden bullish divergence (purple).
8) Bullish price action: price is moving impulsively to the upside after a zigzag correction down.
9) Bullish candle sticks: bullish daily candles after bullish engulfing twins at bottom are confirming the upside.
The upside has lots to show for itself.
One word of caution its the potential resistance at 1.0440. That is a fractal on the daily chart and could cause resistance.
Other than that there seems to be clear sailing up to the trend line and the -0.272 target. The trend line is currently at 1.0650 but will keep rising as time passes of course. The target is at 1.0737.
Entry strategy: the entry I am looking for occuers when there is a 1 hour corrective and slow correction to the downside, followed by a break to the upside. OR a move back to the support levels indicated on the 1 hour chart (green).
EURCAD FINALLY, FINALLY MOVES
The EUR CAD had been stuck in a sideways move forever. The daily chart shows 12 to 14 daily bars sitting right next to each other. Finally the break to the upside arrived end of last week and we are seeing a continuation of that trade now.
Needless to say but we have been monitoring the upside for a long time. The break of the weekly trend line in May gave good hope for a trending mode (purple). After the currency pair topped out at 1.38 and broke the up trend line (dark green), a 3 wave correction brought the currency back to the 500 Fib the bounce at that level created a correction (orange / red). The currency is now wel established in the up trend (light green).
Here too I am looking for similar setup as the EURCAD.
Thank you so much for your reading and sharing of the artice, it is greatly appreciated!!
Latest posts by Chris Svorcik (see all)
- How to Apply Technical Analysis Step by Step - November 25, 2014
- Multiple Trade Setups on EURUSD and USDJPY - November 24, 2014
- A Collection of Currency Pair Characteristics in Forex Market - November 23, 2014
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