It looks like the pair is consolidating between 1.1300 and 1.1350 at the moment. Traders are patiently waiting as we will see multiple, major US economic reports tomorrow morning. At 8:30 am EST we have the Durable Goods Orders which is forecasted to come out at -5.0%. Then at 10:00 am EST we will see the Consumer Confidence and Existing Home Sales report, both of which are forecasting weaker than previous months numbers. So, we should definitely see some action tomorrow, but will it be enough to push the Greenback down further against the Loonie, which has gained significantly on strong commodity prices? We’ll just have to wait and see. For now, I’m going to go with the trend as the Loonie gains on strong commodities, and short the pair if it is able to sustain a move below 1.1300.
My areas of concern for this trade is that the USD sell off may be short term, over extended and we may see a correction, and drop in commodities, or an upside surprise to tomorrow’s numbers will cause the pair to rise. But with recent US data as weak as it has been, I think we’ll see weaker numbers. Here’s a short trade idea:
Short USD/CAD at 1.1290, stop at 1.1320, pt1 at 1.1270, pt2 at 1.1260
Good luck and good trading!