USDCAD: Temporary bounce to extend
Wednesday's upside rejection proved important yesterday. A renewal of more pronounced selling resulted, maintaining USDCAD near to the lower end of a declining Keltner channel and trading to the most negative levels for eight weeks. Signals for sentiment are, of course, oversold and although there is no clear sign of downside exhaustion, concern is introduced in the form of the 8-10 rule that rarely does any currency pair move further consecutively. This statistic is the basis for our expectation that Asia's rally has further to go.
Management and risk description
A move to 1.2831 means the stop can be raised to break even or better.
Entry: Buy in 1.2795/00 area and dip to 1.2763.
Stop: 1.2735 offered.
Target: 1.2831, 1.2862 or even 1.2901.
Time horizon: Intraday, end 1pm London time (ahead of CAD data).
9th down day
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