Technical Analysis USDCAD : 2014-06-30

Good afternoon, dear traders. Today in the evening (14:30, CET), we expect the publication of the GDP, Canada, reported by the Statistics Canada. The GDP expresses the value of products and services over the past month. It is an objective and inflation-adjusted indicator. The GDP indicator indicates the index change regarding the values of the previous month (%).Today the indicator growth is predicted from 0.1% to 0.2%, but if the forecast is weaker than expected, we will observe the investor frustration; the GDP is one of the key analytical indicators. This effect will inevitably lead to the Canadian Dollar weakening against the base currencies, and especially against the U.S. Dollar: so the Canadian Dollar will be ready to be sold.


Here we consider the USD/CAD currency pair on the H4 chart. The price broke the resistance of the H4 trend channel. The RSI-Bars divergence has been previously detected: the bar preceding the breach that is marked in yellow on the chart. The oscillator confirmed the expectations and successfully generated an anticipating signal, for which we are immensely grateful for. Simultaneously with the formation of breach candle, the bullish ParabolicSAR reversal and the PivotPoints signal line crossing upwards took place. It would be hard to imagine a more complete picture for the new upward trend formation. We should be prepared for the opening of a long position.

The pending order is to be preliminary placed above the key fractal peak at 1.06949. This key level is confirmed by the first PivotPoints resistance. Stop Loss is to be placed below the previous Bill Williams fractal at 1.06578, which coincides with the historical value of the ParabolicSAR indicator. It is recommended to move the Stop Loss after the parabolic values every 4 hours after the order execution. Thus, we can optimize the return/risk ratio in our favor in the process of changing market conditions. If you decide to take a break from the market, the automatic Trailing Stop can be placed, taking the distance between the two previous fractal peaks into account. This distance is indicated by the double arrow on the chart above.

Position openingabove 1.06949
Stop loss below 1.06578


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