USD/CAD: Potential swing trade short
Updated
We outlined a bearish bias in a previous USD/CAD article which clearly did not play out, thanks to hawkish comments from Fed members, hawkish FOMC minutes and stronger economic data for the US. However, a strong Canadian employment report on Friday has now seen odds shift in favour of a 25bp BOC hike this week – and if that is to be coupled with a soft(er) than expected US inflation report, perhaps we’ll finally see that swing trade short play out after all.
A 3-wave rally has stalled at the 50% retracement level and 50-day EMA to suggest a swing high is in place. We’ve seen a minor attempt to retrace within Friday’s range during Asian trade (and a higher retracement would be welcomed to help improve the potential reward to risk ratio).
Assuming momentum has realigned with the bearish daily trend, a move towards (and break beneath) the June low on its way to 1.3000 is now in focus.
A 3-wave rally has stalled at the 50% retracement level and 50-day EMA to suggest a swing high is in place. We’ve seen a minor attempt to retrace within Friday’s range during Asian trade (and a higher retracement would be welcomed to help improve the potential reward to risk ratio).
Assuming momentum has realigned with the bearish daily trend, a move towards (and break beneath) the June low on its way to 1.3000 is now in focus.
Trade closed: target reached
The initial target near the June low was reached on Thursday thanks to a set of soft CPI and PPI data from the US. Friday's bullish engulfing candle now sees us step aside for the time being.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.