Technical Analysis USDCAD : 2014-09-03


Good afternoon, dear traders. Today at 16:00 CET we expect Stephen Poloz, the Governor of the Bank of Canada, to give a speech on the monetary policy outlook. BOC Rate Statement will be announced before his speech being given, therefore, Poloz is supposed to comment on this event regarding inflation and economic development of Canada. However, the base rate has been maintained at 1% since 2011, so investors do not expect any significant changes. The primary expectations are aimed at the economic development prospects, which will be provided by the Governor of the Bank of Canada. These signals can greatly affect the Canadian dollar position against the most liquid instruments of the Forex market.

USD/CAD

Here we consider the USD/CAD behavior on the D1 chart. The price approached the weekly trend line, and as the large-scale trend has a bearish bias, we should expect the price reversal into the red zone. At the moment there are first signs of range corridor support would be broken: ParabolicSAR had a bearish reversal. Meanwhile the price was having uncertain movements in the range, RSI-Bars signal formed a weak downtrend. We will be sure in the movement direction of the price after the fractal support breach at 1.08114. It is confirmed by the Parabolic historical values and the DonchianChannel(13) lower boundary. The preliminary risk limitation is recommended to be placed above the last resistance at 1.09943. This level is confirmed by Bill Williams fractal and the two trend indicators.
Note that the volumes of futures and options traded on the Chicago Mercantile Exchange are indicating a weak increase: pay attention to the trend line on the chart. It gives a signal that investors expect a new momentum and increase gradually positions. You can monitor the trading volumes for this currency pair by clicking here.

After position opening, Trailing Stop is to be moved after the ParabolicSAR values, near the next fractal peak. Thus, we are changing the probable profit/loss ratio to the breakeven point.

PositionSell
Sell stopbelow 1.08114
Stop lossabove 1.09943

Dear traders. You can see the detailed report of the author’s account by clicking here.

Note

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Call