Hello Traders,
Prior to Donald Trump Presser, the CAD was on the receiving end and it sure was for the USDCAD pair which was rallying since investors were keen on what Donald had to say on how his administration was going to implement his fiscal policy. Investors got disappointed as a number of important questions went unanswered and no mention of clear economic recovery plans were made. Instead it was all about China, Russia hackings and unsurprisingly how Hillary was unfit to be the president elect. The USDCAD reversed it gains during the presser but it wasn’t the same for AUD which gained despite positive news trickling in that Saudi Arabia intended to reduce exports to Asian and specifically China this coming month. This output reduction was in line with OPEC agreements made in late November with intentions of supporting oil prices which had plunged to lows of $29/Barrel. Progress made by OPEC to create demand is being neutralized as drilling in North America ramps up and reports indicating that despite November agreement, some OPEC members aren’t straight with their records of output. Iraq in particular will increase its exports from its Southern Port of Basra to a record high of 3.64Mbpd this coming February. With reduced imports from Saudi Arabia, Chinese traders are filling the gap by importing from Azerbaijan and North Sea. Exports from this region alone are at 22M bpd which isn’t supportive of Oil and CAD by association.
To the charts and as it is seen in the daily chart, resistance trend line was broken earlier in December and has since acted as support in January. There is an oversold stochastics with prices making series of higher highs after the 20 day moving average was broken. Right now, price is trending at resistance-0.98 and break above is likely.
Our trade plan after the combination of the above technical and fundamental hindsight is to as follows:
Entry will be in the 1 HR chart and we look to buy only.
Buy Limit: 0.9780
Stop Loss: 0.9745
Take Profit: 1:3 risk reward ratio.
Buy Stop: 0.9820
Stop Loss: 0.9780
Take Profit: 1:3 risk reward ratio.
Have a good trading day.

AUDCAD 1HR Chart-12.01.2017

Source: Dalmas Ngetich

AUDCAD Daily Chart-12.01.2017

Source: Dalmas Ngetich

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