Improving data bullish for Canadian dollar
Recent positive data suggest Canadian economy performs better than expected. Will the USDCAD continue recent slide?
USDCAD: D1has been trading with negative bias on the daily timeframe since it hit a sixteen-month high in the beginning of May. The price is testing the 50-day moving average MA(50).
- The Donchian channel indicates no trend yet: it is flat.
- The MACD indicator is neutral.
- The Parabolic indicator gives a buy signal yet.
- The stochastic oscillator is falling but has not reached the oversold zone.
We expect the bearish momentum will continue after the price closes below the lower bound of the Donchian channel at 1.2431. A price point below that level can be used as an entry point for a pending order to sell. The stop loss can be placed above the upper Donchian bound at 1.2598. After placing the pending order the stop loss is to be moved to the next fractal high following Parabolic signals. Thus, we are changing the profit/loss ratio to the breakeven point. If the price meets the stop loss level (1.2598) without reaching the order (1.2431), we recommend cancelling the position: the market sustains internal changes which were not taken into account.
Summary of technical analysis:
| Position | Sell |
| Sell stop | Below 1.2431 |
| Stop loss | Above 1.2598 |