Technical Analysis USDCAD : 2014-02-05

Hello dear traders. Today, the U.S. and Canada will present us two more opportunities to find a good point to enter the market. Firstly, at 14:30 (GMT0), we expect the Building Permits multiplicative economic indicator from Canada on a monthly basis. This figure determines the subsequent domestic demand for family goods and consumer incomes. The relative growth is expected to be from -6.7 % to 2.3 % and it is a very positive outlook. Despite the monthly estimate, the indicator has a long-term memory effect, its changes have general trends of revenue growth for over a few previous months included. The second event is the employment data in the non-agricultural sector of the U.S. (ADP Non-Farm Employment Change) that comes out at 14:15 (GMT0) and in our point of view it has a local impact, and therefore it has got the opposite prediction from 238 thousand to 191 thousand people. Both projections indicate a probable weakening in the Canadian Dollar.

Today we watch the USD/CAD. The ParabolicSAR confirms a falling channel on the four-hour chart. The bearish strengthening began after the head and shoulders and the rising trend line breakthrough - a strong signal for traders awaiting the correction. At the moment, the price crossed the Pivot signal line - the next frontier is at 1.10187. Its breakthrough is preceded by the RSI(14) down from the sideways channel. We recommend to place a pending order to buy and modify it after the ADP Non-Farm and Building Permits. The order should be kept in case when the indicators confirm the negative outlook. If the price breaks the next resistance level after the publication, it is also recommended to cancel the order. The patient traders can adjust the position every 4 hours according to the ParabolicSAR.

Position openingbelow 1.10466
Preliminary stop lossbelow 1.10968

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