Day trade
Trade view / 31 August 2016 at 4:47 GMT

USDCAD: Buying a dip as expanding wedge breaks

Analyst / PIA First
United Kingdom

USD Index: The index continued its move to the upside yesterday from Friday's low of 94.20. There is no clear indication of a change or trend but the rally has stalled at the top of the daily Ichimoku cloud. Ample scope for a correction lower but we look for dips to be bought into.

usd index
Source: Saxo Bank 

USDCAD is the FX major of choice today and we look to buy into dips. 

Monthly: The chart highlights a bearish Gartley formation. However, we have had a five-month period of consolidation with scope for a mild move to the upside without impacting this negative bias. 

Source: Saxo Bank 

Weekly: We are in a corrective channel formation higher. We are assessed as being in the final bullish leg of this pattern. We have a Marabuzo level from the week of August 8 at 1.3052 (mid-point from open and close). However, we see no real barrier until 1.3310. This is the base of a deep Ichimoku Cloud and the 38.2% pullback of the 1.4689-1.2459 move. 

 Source: Saxo Bank. Create your own charts with SaxoTrader; click here to learn more

Intraday (six-hours): We are breaking the expanding wedge formation to the upside. This has a minimum target of 1.3250 (start of the wedge). We also have a 261.8% extension of the 1.2762-1.2959 move located at 1.3278, just below the aforementioned 1.3310 barrier. This is our target ‘zone’ (1.3250-1.3310). 

Source: Saxo Bank 

We are just posting an inverted hammer close to the 161.8% extension of 1.3081 so we prefer to buy into mild dips today. Bespoke support is seen at 1.3035.

Management and risk description

A move through 1.3200 and we move stop to entry.


Entry: Buying a 1.3040.

Stop: 1.2990.

Target: 1.3250-1.3310 zone. 

Time horizon: This week. 

— Edited by Susan McDonald

Non-independent investment research disclaimer applies. Read more
31 August
Dj TinTin Dj TinTin
Morning Ian I'm in. down at saxo bank London today for the 1st time don't you just love days off, living the dream haha
31 August
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
Morning my friend. I am waiting for the dip first. That sounds like a good day. Seminar ?
31 August
Dj TinTin Dj TinTin
Yep, got into the trade yesterday on the dip
31 August
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
Well done. Just waiting for the USD correction to complete so keeping my powder dry this morning
21 September
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
I am holding out for a hike... I know I am against the market. I like other USD pairs to short and crosses. Think if you want to play JPY then selling EURJPY or AUDJPY will be good (through the figures). This is because it will e bad for stocks

I think the best pair is EURUSD..... this last move being a mild three wave correction.

Think EURCHF might do down so no to buying USDCHF... EURGBP down .. so no to buying GBPUSD..

I think EURO will weaken against just about everything .......

If they hike ... the trading a break at 1.1135 looks good (don't know if you'll get filled there !! )


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