FX Market Update – CAD $ Positions

*A quick update on my technical analysis for the USDCAD FX currency pair and trade positions*

In this blog post I am going to talk you through my previous and current technical and fundamental analysis of the USDCAD FX currency pair. I will show you where I have bought and sold this instrument over the past few weeks and where I think it will go next.

As always, my technical analysis and chart work is done using the TradingView platform which can be accessed using the link below.

https://tradingview.go2cloud.org/SH3bP

Let’s start by looking at my current open positions on the USDCAD FX currency pair. I am trading spot prices rather than a specific futures contract so make sure you are looking at the correct price chart if you are following this analysis.

USDCAD Spot price chart
(positions shown)

I currently have 3 separate long positions on the USDCAD FX currency pair with an overall bullish bias for the rest of this week and potentially through the coming weeks. Each long position entry is marked on the chart above using an arrow.

  • Long position 1 @ 1.38720
  • Long position 2 @ 1.39200
  • Long position 3 @ 1.39900

The technical analysis for each entry is different but they all relate to simply trading with the trend, buying the lows of a bullish movement and supporting my overall fundamental bias that US dollar should see demand increase once again as coronavirus and recession fears continue to increase.

The chart below shows each long position marked on with the basic technical analysis detailed.

USDCAD Spot price 1 hour timeframe chart
(detailed)

Excluding the first entry which was buying off an established support zone (shown again later in this post), the remaining 2 trades currently open have been buying bullish moemutm and riding the current trend.

If you look at the past 3 days of price action there is a nice bullish trend forming. Using support/resistance zones, a few technical indicators and common sense it is possible to trade this trends with good conviction.

Trade management.

I am looking to trade this currency pair upwards for as long as it remains bullish. This week price has, so far, made higher highs and higher lows to form a day to day bullish trend. I am hoping this continues up to the nearest price resistance zone I have marked on @1.41500. I will lock in profits there and keep the remaining long exposure open for the potential that the larger resistance @1.42500 is then reached.

As I have mentioned multiple times over the past few months, the markets are highly volatile right now and very twitchy. This can cause strong trends to be eradicated quickly and price action can become immediately choppy. In my opinion, it is always good to secure some returns when possible and remove or reduce exposure when suitable.

Small consistent returns on capital over a long period of time still add up to good capital growth. Don’t be greedy!

Financial market fundamentals.

US dollar is a tricky one when it comes to safe haven flows. It saw strong buying when the coronavirus global lockdown first began but it doesn’t always act as though it is a go to for safe currency holdings.

The main mover of USD in recent weeks is the US Feds efforts to stimulate stock markets and the economy with their relentless quantitive easing. This produces big short term price spikes and selling of USD as they are effectively weakening the currency by increasing supply through various channels.

We have the US Retail data coming out this week which should cause movements so make sure you are aware of that if you are trading the USD currency or US stocks/stock indices.

Canadian inflation figures are due to be released on the 20th May along with crude oil inventories, storage, imports and export levels data.

Click on the link below to check out the same economic calendar that I use regularly.

https://www.dailyfx.com/economic-calendar#yesterday

Future price predictions.

Predicting exact price movements is always difficult but the chart below shows my basic thoughts of how price might move over the next few days/weeks.

USDCAD Spot price 1 hour timeframe chart
(future price predictions)

As it stands, price is making higher lows and higher highs and is bouncing off of the 1hr 50EMA as a dynamic support. If this 50EMA holds for the rest of this week then I see now reason why USDCAD wont continue up to the near term resistance @1.41500. This is marked on the chart above.

That level as seen 2 previous rejections so it will be another bounce or break situation once again. I will be looking to take profits at this zone if price rejects it and it reacts as resistance once again. However, if price does break above 1.41500 then there is little in the way of resistance stopping it from going up to 1.42500.

Long term, I am believing we will see more USD buying. The chart below shows “the bigger picture”.

USDCAD Spot price 4 hour timeframe chart
(the bigger picture)

The early 2020 buying through late January and February was very strong. From there price has began to consolidate and I believe this is just an accumulation phase before momentum continues again. We might not see new yearly highs made but there is a good chance that price could go back up to retest the upper resistance zone @1.46500. Even this would produce significant returns from buying at current price levels.

On this higher timeframe chart you can also see that lower support zone @1.41600 much more clearly. This is why I made my first USDCAD purchase there.

Useful Links:

All my technical analysis is done using the TradingView platform. You can get access via the link below.

https://tradingview.go2cloud.org/SH3bP

My preferred broker of choice is IC Markets. Low spreads and trading costs really help long term profitability. A link to their site is below.

https://www.icmarkets.com/?camp=38537

FTMO Trader Funding Programme.

https://ftmo.com/?affiliates=335

Thanks for reading and please don’t forget to LIKE, SHARE and FOLLOW my blog to stay up to date with the latest market analysis and trading education posts.

DISCLAIMER: None of the information posted on this site is to be considered investment/financial advice. Trading is high risk and you should only trade with money you can afford to lose.

%d bloggers like this:
search previous next tag category expand menu location phone mail time cart zoom edit close