Day trade
Trade view / 27 February 2014 at 10:19 GMT

USDCAD above 1.1141 set to take another leg higher

Background

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. 

Parameters

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

usdcad-st
Source: Saxo Bank

Five-year USDCAD chart

usdcad-lt
Source: Saxo Bank

Disclaimer:
Non-independent investment research
This investment research has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Further it is not subject to any prohibition on dealing ahead of the dissemination of investment research. Saxo Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. » Read more

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