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Trade view / 15 August 2016 at 7:06 GMT

USDCAD selloff showing signs of exhaustion

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

USD Index – Strong dip buying in the index on Friday would suggest that the corrective bullish sequence is still in play. A full AB=CD formation would take the dollar to 96.75.

USD 6
 Source: Saxo Bank

The daily chart highlights this area as being pivotal through 2016. There is ample scope for a move in either direction today but we look to sell into rallies as a weekly play.
  
USD D
Source: Saxo Bank

Struggling to pick an FX major that we think will outperform today. USDCAD is showing some signs of exhaustion and there is ample scope for a corrective rally.  

Monthly – Highlights a bearish Gartley but, for the last five months, the commodity pair has consolidated. 

USDCAD M
 Source: Saxo Bank

Weekly – Shows a bullish channel formation. We are holding the trend of higher lows this morning. This gives a mild positive bias but, with last week’s strong selling, rallies may be limited. Last week’s Marabuzo (mid-point from open and close) is seen at 1.3052.

USDCAD w
 Source: Saxo Bank

Daily – Five negative days in succession but the selloff stalling at the daily Ichimoku Cloud.
  
USDCAD D
 Source: Saxo Bank

Six hours – Highlights the pair completing a bearish five-wave pattern at the 423.6% extension level of 1.2928 (common in commodity pairs). This is also seen close to the base on a corrective bearish channel formation. 

USDCAD 6
Source: Saxo Bank 

Intraday (15 minutes) – Intraday timeframes highlight a possible reverse Head-and-Shoulders formation.

The brave could look at buying close to the projected right shoulder at 1.2935 (I would only recommend this if we see a strong reversal formation – Doji Star, Bullish Outside Bar). Confirmation would be on a break of 1.2975.

The measured move target is 1.3035, close to last week’s Marabuzo level. 

USDCAD 15
 Source: Saxo Bank

Management and risk description

Parameters

Entry: buying a dip close to 1.2935 and/or a break of 1.2975.

Stop: 40 pips from or entry or combined. 

Target: 1.3035.

Time horizon: 2-3 sessions.

— Edited by Martin O'Rourke

Non-independent investment research disclaimer applies. Read more
15 August
vyacheslav111 vyacheslav111
Hi! Your opinion on USDCAD now?
15 August
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
still the same. I would like this hour to post a bullish engulfing candle ..... we will see
15 August
vyacheslav111 vyacheslav111
Thanks!!!
16 August
vyacheslav111 vyacheslav111
Здравствуй! Ваше мнение по USDCAD сейчас?
16 August
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
It didn't break the neckline> I am not in it
16 August
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
next support at 1.2835
16 August
Allied Allied
How did you not get in this trade idea... 1.2935 trade 4 times... Very strange.
16 August
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
The brave could look at buying close to the projected right shoulder at 1.2935 (I would only recommend this if we see a strong reversal formation – Doji Star, Bullish Outside Bar). Confirmation would be on a break of 1.2975.

I didn't see a strong reversal pattern
16 August
Allied Allied
I will double check going forward what trades you enter and don't. Easier that way!

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