Trade Of The Day: USDCAD To Test 2003 Highs
Trade of The Day – Fundamental: CAD hit its weakest point against USD since mid-2003, as oil prices fell and traders remain concerned about the pace of growth in China. The loonie lost 16 percent of its value in 2015 as the Bank of Canada cut rates twice to offset the negative impact of low prices for oil.
Technical: Bulls have the ball while 1.37 supports, expect a grind higher to test stops above 1.41 while 1.3940 caps intraday downside. A close below 1.37 would ease the near term bullish bias. The next key technical levels to the upside are 1.4189 (23 July 2003 high) and 1.4509 (76.4% Fibo retracement of 1.6193 to 0.9058)
- Overnight the USDCAD has made a sustained breach of the psychological 1.40 level, I am now looking for a squeeze higher today as stops are cleared above the figure. Ideally I will be looking for tonight’s risk even of the FOMC minutes to be the catalyst for a further push higher to the 2003 highs of 1.4189 and potentially a symmetry pattern to complete with a run at 1.42 that stalls at or above the figure as per the chart below.
- I will be monitoring intraday reversal patterns at the 1.42/1.4250 to play a counter trend corrective trade as traders chase the price action higher at less premium entry levels, I will be looking to trade a correction before looking to re-position with the broader trend.
- Trading Update – Stops to entry 1.4250
For updates on trade of the day set ups and the other trades I am currently monitoring be sure to follow me on Twitter @LFXPatrick