Day trade
Trade view / 06 June 2016 at 7:09 GMT

Move on rallies as downside underpins USDCAD

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

USD Index – There was a strong selloff on Friday after the poor US nonfarm payroll figures. The medium-term bias remains mildly bullish. We have a 261.8% extension level at 93.83 (from 95.96-95.14) and have seen a mild recovery overnight. Rallies are likely to be sold into today as this corrective sequence plays out.

USDCAD – The monthly chart highlights a bearish Gartley pattern that’s keeps the focus to the downside. The next formidable barrier is at 1.1200.

Monthly - Bearish Gartley
Source: Saxo Bank

The weekly chart highlights a bullish Outside Bar at the base and mixed (weekly) results as the commodity pair moves higher in a corrective formation. The likely zone to focus on is the 50% pullback level at 1.3573.

Weekly - Corrective formation
Source: Saxo Bank

The daily chart highlights a wedge breakout with the target level of 1.3155 achieved.

Daily - Wedge breakout
 Source: Saxo Bank

The intraday chart (two-hours) highlights the pair in either a corrective channel formation or a descending triangle (with a pause overnight close to the previous low). Both have an immediate downward bias. Friday's Marabuzo level is at 1.3013. Bespoke resistance is at 13010. This is our zone to get short today.

Two-Hour - Corrective channel or bearish triangle
Source: Saxo Bank 

Management and risk description


Entry: selling at 1.3010.

Stop: 1.3050.

Target: channel base at 1.2870.

Time horizon: 2-3 sessions.

— Edited by Martin O'Rourke

Non-independent investment research disclaimer applies. Read more


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