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Loonie

USD/CAD – Week 7 – “The Loonie” undecided yet.Friday’s stats didn’t have a big impact on the “Loonie”, as the price moved corrective for the whole week. We consider this consolidation to potentially be the trigger for a bullish move that can push the price towards the $1.30 area. However, the pair can go on and create a new low, but our focus will remain on the bullish move. Don’t forget to be patient and don’t jump in any trade without a proper setup. Trade with care. Best regards, Financial Flagship Disclaimer: The analysis provided is purely informative and it should not be used as financial advice. Remember that you need a plan before you start trading; so, take this knowledge and use it as a guidebook that will ultimately help you understand the market and easily predict your next move.
Long
by financialflagship
USDCAD 4th leg up and 5th leg downPlaying with some ideas, not a trade to copy - testing key levels as part of a bigger picture. Hence up to then drop down. Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Long
by Mayfair_Ventures
USDCAD Conflicting CluesLast Friday we had unemployment figures from both Canada and the US. Below were the results. USA - Average Hourly Earnings (YoY): 5.4% USA - Nonfarm Payrolls: 49K USA - Unemployment Rate: 6.3% CAD - Employment Change: -212.8K CAD - Unemployment Rate: 9.4% Here you can see the US reported their unemployment rate at 6.3% signaling a nice improvement, following a not so nice NFP report with only 49k new jobs. On the other ide of this pair, Canada reported a much higher Unemployment figure at 9.4%. The initial reaction with USDCAD was bullish but then as the trading session progressed this pair continued getting weaker. Some key drivers heading into this week include: Earnings, Stimulus, Core CPI (Wednesday) US Federal Budget d (Wednesday) Fed Monetary Policy Report (Thursday) and perhaps some further CAD strength if Oil Continues it's bullish path towards $60. As we know, certainty surrounding additional stimulus supports a stronger equity market and thus drives the TVC:DXY lower. On a technical basis, the pair is indicating some strange behavioral patterns such as the convergence seen here on the daily chart. RSI did manage to close below 50 heading into Friday's close. A close below 50 does indicate that we could be heading lower but if you take a closer look how the 50 level behaved with this pair, you'll many instances when that may have been a misleading clue.. Needless to say, holding below 50 is taken into minor consideration, but we should also monitor the next 2 major fib levels such as the 50% and 61.8% illustrated on the chart. Key clues regarding the direction of this pair should include keeping a close tabs on the TVC:DXY TVC:SPX TVC:NDX TVC:VIX and of course overall market sentiment. Trading Recommendations == keep bullish trading activities light with this pair considering we may still see some further bearish downside == keep shorts limited as well considering there very well could be some upside towards 1.30 ------------------------- Please don't forget to FOLLOW, LIKE, and COMMENT ... If you like my analysis:) Trade Safe - Trade Well Regards, Michael Harding 😎 Chief Technical Strategist @ LEFTURN Inc. RISK DISCLAIMER Information and opinions contained with this post are for educational purposes and do not constitute trading recommendations. Trading Forex on margin carries a high level of risk and may not be suitable for all investors. Before deciding to invest in Forex you should consider your knowledge, investment objectives, and your risk appetite. Only trade/invest with funds you can afford to lose.
by Michael_Harding
1
USDCAD - What's next!?Loonie - USDCAD - Trade idea! It's called Loonie for reason, not my favourite pair but I do great potential both sides of this trade idea. This will be very interesting as we had great amount of energy from WSB dominating the market, will it be the same this week? I suppose it - Equites will decline further will given the headlines out: JPMorgan to pay $920 million for manipulating precious metals, treasury market! Technical aspects of Silver does look very attractive. I will post that idea privately - If you're interesting in XAGUSD Silver developments message privately for my aspects. Fundamental Aspects: The data-flow in Canada has continued to be on the positive side as the monthly GDP numbers for November showed a 0.7% increase, this week data jobs market data come into focus. Canadian employment numbers have outperformed and any improvements on the OPEC members meeting will be interesting that could shift CAD in either direction. Technical Aspect: Pattern: Ascending Wedge (Medium term) Double top (Short term) Support: 1.27550, 1.27405, 1.27000, Resistance: 1.28360, 1.28800, 1.29285, 1.29860 Short term: Double top developed measured taking it towards a nice support area of Ascending Wedge to take long opportunity. How could you play the trade: - You should take the short side to support areas with confluence of pattern in play short term - Enter at nice support areas once confirmed This all depends on your trade plan execution. Key Tip: The internet is a wonderful gift and time is too, combine both can generate great amount of wealth if used wisely. Have a great week ahead Best wishes, Trade Journal (Just trade ideas, not a recommendation)
by Trade_Journal
USDCAD - Great R/R Trade idea!USDCAD - Technical Aspect: - Pattern: Rising Wedge - Fib Retracement: At 0.23 - Measured could reach the next Fib Retracement area of 100. - Support: 1.26805, 1.26690, 1.26360 - Resistance: 1.27145, 1.27315, 1.27600, 1.27910 (The target areas I will be approaching as time goes by - high lighted in Blue) The approach you could take towards this trade idea: Wait for the break out, go in at the pull back for great R/R Add orders Add alerts Adding further confluence check oil instruments As I always mention and I will repeat this 100 times because it's very important - Go with what's on your trade plan! The greatest potential trading gives us is the immense amount of creativity it gives us traders, the way we all trade is different and that's what makes you a great trader - allow yourself to have your own edge towards the market this is just an idea I give you, add your own analysis, your own opinion matters most it gives you confidence . I may not use lagging indicators but I know very successful institutional traders that do and they excel well because that's there edge . Do what suits you best! Making sure your strategy is successfully generating capital that's what matters. Key tip: Never copy ideas, you will always be one step behind. All the best, Trade Journal (Just a trade idea, not a recommendation).
by Trade_Journal
2
Bank of Canada to Cut Interest Rates Next Week?My readers and followers are up to date on the ongoing currency war. Central banks are attempting to weaken their currencies in order to boost inflation and exports. The export part is self explanatory and well known, but the inflation aspect involves the classical economics definition of inflation. Inflation is the weakening of a currency where it takes more of the weaker currency to buy something which gives the appearance of prices rising. It really is the currency that is weakening. Now the Bank of Canada is set to make its next move in the global currency war. Just a quick recap: central banks have three ways to weaken their currencies: 1.Rhetoric. This is the most common way central bankers weaken or strengthen a currency. Also why the press conferences are closely monitored by traders. Chairmen (and women) use diction and rhetoric as a way of telling market participants what they are planning on doing in the future. The market reacts and prices this in. The currency moves in the way the central bank wanted. 2. Interest Rate Cuts. This is the next step up using interest rate differentials to either strengthen or weaken the currency. 3. Quantitative Easing. The final and most extreme way to weaken the currency using supply and demand principles. Most central banks have exhausted 2 and 3. The European Central Bank is the one I have been following for awhile. The ECB is trying to weaken the Euro as the European Union is a heavy export union. The problem has been the US Dollar, the true winner of the currency war so far. Since the US Dollar is the reserve currency, if the US Dollar is dropping, the other currency is strengthening. This includes the Euro, the Pound, the Loonie, the Aussie Dollar, the Kiwi Dollar, the Yen etc. The ECB increased their emergency asset program up to 1.8 Trillion Euro's in December. The Euro popped. Now all the ECB has left is to cut rates deeper into the negative. Expect this to happen. "Money markets see an increased chance of the Bank of Canada cutting interest rates closer to zero, as tightening economic restrictions to contain a second wave of COVID-19 cases offset optimism that activity will rebound later this year. Interest rates were thought to have hit rock bottom in Canada after they were slashed 150 basis points last March to a record low of 0.25 per cent, a level the Bank of Canada considered the effective lower bound. But in November, Governor Tiff Macklem said a lower floor could allow Canada’s central bank to ease further if the economy weakens." After these statements, the expectations for Canada to cut rates next week has increased. But don't worry, it is not negative rates. Yet. The Bank of Canada is expected to do a microcut, or an interest rate cut less than 25 basis points. The Bank of Canada's rate currently is 0.25%, and expectations are rates to decrease to 0.10%. Microcuts have occurred already. "Other central banks have moved in small increments. In November, the Reserve Bank of Australia cut its policy rate by 15 basis points to 0.1 per cent, while the Bank of England did the same last March." The Bank of England is now expecting to enter negative rates sometime before June of this year. The Reserve Bank of Australia will be next, and I am sure the Bank of Canada and then eventually the Federal Reserve will follow. All to attempt to weaken the currency, and why I have been saying the trade is out of fiat. Hard assets/commodities and cryptocurrencies are the way to play this going forward. Let's take a look at the USDCAD. The Loonie has been appreciating against the US Dollar as the Dollar (DXY) keeps sliding. You have seen in my previous posts, that I believe the DXY is at a MAJOR support zone and a relief rally is highly probable. Funnily enough, the USDCAD is also at a major support zone, and is looking like the Dollar will strengthen against the Loonie. On my chart, I have drawn a trendline which is a popular way to determine when a trend shift occurs. If price closes above the trendline, the Loonie will depreciate against the US Dollar. However, I am hoping we develop a right shoulder to create a head and shoulders pattern with the neckline being the zone above in blue at the 1.30 zone. This would imply price pops up, and then retraces before breaking and closing above. The interest rate cut could be the catalyst for the reversal pattern. This was expected. This is the currency war.
Long
by Uncharted-FX
1