Day trade
Trade view / 06 July 2016 at 7:18 GMT

Dips to find buyers in USDCAD

Analyst / PIA First
United Kingdom
Instrument: USDCAD
Price target:
Market price:

USD index: Broken out of the corrective channel to the upside. Intraday signals are looking a little overstretched at current levels and there is scope for a retest of the channel breakout. Our system highlights dips to be bought. 

USD index (channel breakout):
Source: Saxo Bank

Some interesting patterns across the board today. Yen crosses have hit some intraday 261.8% extension levels. GBPUSD is at a monthly 161.8% extension. I think we could even get a turn in EURGBP (using correlation), but it is too early to tell (Doji top at the moment). 

We also have intraday 261.8% extension on AUDUSD and EURUSD (rallies to be sold). 


Monthly: After the Gartley formation, we are still long-term bears. Plenty of scope for a move to the upside without damaging this outlook. 

Source: Saxo Bank

Weekly: Looking for a move higher in a choppy CD leg of an AB=CD correction. Note that we are inside the cloud. This sometimes results in a lack of clear trend on shorter timeframes. The target level is 1.3370.

Source: Saxo Bank

Daily: Broke the sequence of five negative performances yesterday while posting a Bullish Engulfing daily pattern. Cloud support is now at 1.2935.

Source: Saxo Bank 

Four-hour: We did break the expending wedge formation to the upside but the rally could not be maintained. Yesterday’s buying has seen this level taken once more. 

Source: Saxo Bank

Market profile: Highlights the Opening Balance above yesterday’s Value Area. This normally highlights that the bullish trend will continue. 

30 minutes: Highlights the positive wave count with a possible fifth wave extension (Elliott Wave). It should be noted that commodity pairs can run to 423.6% (1.3096). The Relative Strength Index is starting to trend lower so we could be in for a short-term correction. 

Source: Saxo Bank

One hour: With the potential for a temporary top in place, we look to buy into dips. Trend line support is seen at 1.2953. The 50% pullback level is at 1.2942. This is the prime buy zone (1.2953-42). 

A stop should be placed below yesterday's Point of Control at 1.2927.


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Source: Saxo Bank


Entry: buying at the 1.2960-40 area. 

Stop: 1.2915.

Target: intraday 1.3050, medium-term 1.3186 and 1.3350.

— Edited by Michael McKenna

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