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The #USDCAD pair could still be the one to watch despite a reduction to the US CPI numbers. Is USDCAD still a good buy?
We’re going to do an update to the USD/CAD position and why I still think this is a decent position to hold.
The market seems to be forming a slight retracement move. We had a decent downtrend with the market making lower lows and lower highs. Once you start seeing short low ranging candlesticks, it means that a reversal will be in play and that’s what we’re playing off at the moment.
CPI
The USD/CAD price could see a rally to the upside despite poor US CPI numbers. Recent news of the US lifting sanctions on Iran individuals caused oil prices to fall sharply, which could have a knock-on effect on the Canadian economy. The weekly timeframe is still showing small low ranging candles at the end of an impulse phase, suggesting that a reversal will likely happen.
We were also waiting for the CPI numbers today. If they came out good, we expected a USD bounce. If they came out bad, then we expected USD weakness. They came out at 0.7% which wasn’t as bad as we expected.
The USD has been fluctuating and rebounding from any kind of weakness in the market so far. Not only this, recent news just came out that oil could be dropping due to the US lifting sanctions on Iran individuals. There could be CAD weakness because of that.
This leads me to believe that the USD/CAD can push to the upside, so I’m going to hold.
Daily timeframe
In the daily timeframe, there are fluctuations in the market. The price has just been going up and down. We’re looking for that to continue to the upside.
It would be good if the price breaks above the 1.2140 area because this is where the resistance is. We’re trading within this range so if the price can break to the upside, then we can look for added positions. That could give confirmation to our overall bias with targets up at the 120 to 70 level.
The market still holds resistance at 1.2140 and would need to break this for the trade to be successful.
Keep an eye on USD/CAD. I still think it’s a good market to watch now that we’ve got some fundamentals coming into the mix. You can also look for a break from the 1.2140 level and retest for long opportunities.
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