USDCAD above 1.1141 set to take another leg higher
After having built a strong base support around the 1.1055-1.1070 zone earlier this week on short-term charts, USDCAD has remained on the bid since yesterday's trading. With the broader dollar strength fuelled by a general risk aversion, the pair remains poised to add to its gains, especially if ongoing geopolitical concerns were to escalate, feeding further dollar buying. In today's intraday trading, we look for the break of 1.1041 level to propel the cross higher, paving the way towards last Friday's highs.
Management and risk description
Publication of both US and Canadian economic data later today will pose as a calendar-event risk for this trade set-up, while the broader source of risks emanate from the Ukraine-related newsflow. We keep overall risk exposure in check and size this trade as a half nominal-size trade order. We will further protect the trade with a tight stop-loss order that will be adjusted to entry once the first profit target has been reached.
Entry: buy a half-size order USDCAD at 1.1141 stop bid.
Stop: sell USDCAD at 1.1123 stop offered.
Target: first target here is at 1.1157, where we will lock in half gains and move the stop to entry. Second target for the remainder is at 1.1180.
Time horizon: intraday.
Short-term USDCAD chart
Source: Saxo Bank
Five-year USDCAD chart
Source: Saxo Bank
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