Short term
Trade view / 15 August 2016 at 13:57 GMT

Fading the intraday bounce in USDCAD

FX Consultant / IFXA Ltd

The USDCAD downtrend which began on August 10 accelerated with the break of resistance in the 1.2990-1.3010 zone, an area that had contained downside moves since July 19. USDCAD losses extended below 1.2947, the 38.2% Fibonacci retracement level of the May-July range which targets both the 50% level at 1.2854 and the 61.8% level at 1.2750.

Despite a blow-out US nonfarm payrolls report on August 5, markets have pared back their expectations for a rate hike in September and for 2016.
Oil prices have rebound on expectations for Opec and non-Opec nations agreeing to some sort of price stability pact at a meeting in Algiers, September 26 and 27.
The prospect of higher oil prices and bearish intraday USDCAD technicals suggests USDCAD risks are to the downside.

Management and risk description 

This trade is vulnerable to a drop in WTI oil prices or a shift in US rate hike sentiment stemming from Wednesday's Federal Open Market Committee minutes. A weaker than expected EIA report on Wednesday would also trigger the stop.


Sell USDCAD on bounce to the 1.2930-40 area 

Stop: 1.2981

Target: 1.2860

Time horizon: 3 days

Chart USDCAD 30-minute noting downtrend line from August 9
 Source: Saxo Bank 

Chart: USDCAD 4-hour with take profit level
Source: Saxo Bank 

Chart: USDCAD 4 hour with Fibonacci levels
 Source: Saxo Bank 

Chart: USDCAD 5 years daily with moving averages
 Source: Saxo Bank

— Edited by Clare MacCarthy

Non-independent investment research disclaimer applies. Read more
15 August
Dj TinTin Dj TinTin
Hi Michael can you see any uptrend in the GBPCAD I'm almost out of the trade any more downside and I'm out
15 August
Michael O'Neill Michael O'Neill
Hi DJ Tin Tin.. sorry for the late reply.

I posted an update to this trade on Thursday

At that time, the stop loss level had been triggered and the trade closed.


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