Relevant articles for you


Ian Coleman - First 4 Trading
Ian Coleman of explains in a technical analysis of charts why he is buying USDCAD. He is looking to set a limit order to buy at 1.2295 with a stop at 1.2235. His targets are 1.2630 and 1.2850.
Short term
Trade view / 12 September 2016 at 12:30 GMT

Is enough, enough for USDCAD rally?

FX Trade Strategist /
Instrument: USDCAD
Price target:
Market price:

In less than four days, USDCAD has exploded higher, rallying from 1.2820 on Wednesday to 1.3120 on Monday September 12. The move was triggered by:  
(a) The Bank of Canada was viewed as dovish due to downside risks to inflation  
(b) Drop in WTI crude oil to $44.82 from $47.75
(c) A quasi-neutral European Central Bank statement leading to questions of the effectiveness of ECB and Bank of Japan monetary policies.
(d) Shift into risk aversion trading

FX markets have got themselves into a lather due to constantly see-sawing Fed rate hike expectations due to mixed US data and Fed speaker comments. Oil prices have bounced erratically on conflicting comments about production caps, etc. ahead of the meeting in Algiers. WTI gains from news of a massive decline in crude oil stocks have been erased.  USDCAD has soared as WTI prices dropped.

Perhaps, enough is enough.

The Commitment of Traders report and other studies indicate that the FX market was rather long Canadian dollars.  Stop losses were triggered on the break above 1.2950 and 1.3050 which may have exacerbated the top-side move. 

If this week’s US data is mixed or below expectations, the US dollar will retreat.

The WTI retreat from $47.75 appears to be corrective as long as the uptrend at from August 1 remains intact (currently $44.00/barrel).

The intraday and short-term technicals show USDCAD in very steep uptrends which are vulnerable to breaking. In addition, USDCAD is close to strong resistance in the 1.3150-1.3200 which has capped rallies since May.

Management and risk description

The key risk to this trade is that the intraday USDCAD uptrend is intact and this idea  recommends selling before there is confirmation that the intraday uptrend has broken. The trade will be stopped out if the current bout of risk aversion expands, creating renewed demand for US dollars. The stop will be triggered if strong US data leads to renewed expectations of a September rate hike. The stop will also get triggered if WTI prices drop through $44.00/b.

Trade idea parameters

Sell ½ USDCAD at market (1.3115) balance at 1.3145

Stop: 1.3208

Target: 1.2975

Time horizon: 5 days

Chart USDCAD 1 hour with take profit and stop loss levels shown
 Source: Saxo Bank

Chart: USDCAD  4 hour highlighting resistance zone
Source: Saxo Bank

Chart: USDCAD  5 year daily with moving averages.
Source: Saxo Bank

— Edited by Clare MacCarthy

Non-independent investment research disclaimer applies. Read more
Michael O'Neill Michael O'Neill
UPDATE: USDCAD dropped quicker than anticipated. Cancel the 2nd sell order and reduce the stop loss to 1.3092, ensuring a small profit.
Estuardorlemus Estuardorlemus
Thanks for the update Mike
kyosuke kyosuke
thanks for sharing


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail