A crop reduction is expected in Canada and the UK
In this review, we suggest considering the personal composite instrument (PCI) "Wheat versus the Canadian dollar". It increases in case of the wheat price growth in the world market and the weakening of the Canadian dollar. Is there a possibility for the WHEAT/CAD quotes to increase?
On the daily timeframe, WHEAT/CAD: D1 came out of the downtrend. The further price increase is possible in case of the worsening of the Canadian economic state and the decrease in the world wheat crop.
- The Parabolic indicator gives a bullish signal.
- The Bollinger bands have markedly widened, which means higher volatility.
- The RSI Indicator came out of the oversold zone and started to rise. It has formed a positive divergence.
- The MACD Indicator gives a bullish signal.
The bullish momentum may develop in case WHEAT/CAD exceeds the level of 550. This level may serve as an entry point. The initial stop loss may be placed below the last fractal low, the 9-month low and the Parabolic signal at 526. After opening the pending order, we shall move the stop to the next fractal low following the Bollinger and Parabolic signals. Thus, we are changing the potential profit/loss to the breakeven point. More risk-averse traders may switch to the 4-hour chart after the trade and place there a stop loss moving it in the direction of the trade. If the price meets the stop level at 526 without reaching the order at 550 we recommend cancelling the position: the market sustains internal changes that were not taken into account.
Summary of technical analysis:
| Position | Buy |
| Buy stop | above 550 |
| Stop loss | below 526 |