Hello everyone!
I’m currently bullish on CAD, on the back of strong economic data from Canada. With solid 3% GDP growth in 2017, inflation near 2%, steady employment data and higher oil prices, the BoC expects that this data will warrant higher interest rates in the future.

On the negative side, there’s still the uncertainty around the impact of Trump’s trade politics on Canada. However, we’ve been seeing signs of tensions easing for the loonie, these past weeks.

Let’s look at the technicals:

USD/CAD - H4

Price formed an, almost perfect, Head and Shoulder pattern with the right shoulder (sell zone) sitting right at the Monthly Central PP. This pattern is a sign that a reversal of an uptrend may be taking place and last week’s price action confirmed the fact. Monthly swing traders sold the pair at the Central PP (1.2938) and will target the level between MM1 (1.2685) and MS2 (1.2617).

USD/CAD - H4

Weekly swing traders will look to sell the pair at the WPP (1.2814) which is the neckline of the H&S pattern, targeting WS2 (1.2604), but always with the monthly trade in mind. Another setup would be selling at the WM3 (1.2857) with a target of WM1 (1.2646).

2 thoughts on “USD/CAD – Trade Pan”

  1. Great plan Joao. It barely touched WPP before it dropped bigtime.

    1. João André says:

      Thank you Daniel!

      It was a nice move, considering that the WPP was also the Neckline of our H&S pattern, which gave us additional confidence to short it.

      Hope you caught the move.

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