The main focus during today’s Asian and European session was WTI which has remained very bullish during the two sessions running at $72.51 (at the time of writing) due to recent geopolitical tensions in the middle east. This has been very supporting for the Canadian dollar, in spite of recent negative talks surrounding NAFTA.
Furthermore, the dollar is continuing to stay rather weak after yesterday’s turnaround, this is inspite of the 10yr US treasury yield which is still firmly above the important 3% level. This might be due to recent retaliatory announcements against the US due to their steel and aluminum tariffs.
Our pair selection for today:
Given the recent USD weakness and CAD strength we have chosen the USDCAD as the highest probability pair to look for opportunities.
USDCAD – M30
USDCAD – H4
With the recent dollar rally we do need to be careful of this trade idea. There are two possible resistance areas as seen in the charts above which we find as good probability places to look to short the pair if we see the right type of selling signals. An important area to take note of is the recent strong support level at 1.2750, if this area fail we might see further pressure to the downside. Conversely, if the pair bounces strongly from this level a move back up to 1.2800 might be on the table.
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Risk Disclaimer: Forex Trading carries a high level of risk. It is possible for traders to lose entire trading accounts if they do not know what they are doing. This post is not an enticement, signal or recommendation to buy or sell any financial instruments. All of the information in this post should only be considered as general market commentary and should never be used as trading or financial advice.
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