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Before the week comes to a close, I’m looking to make quick pips off this textbook trend setup on the 4-hour chart of USD/CAD.

Take a look at the channel pullback levels I’m watching.

Before moving on, ICYMI, yesterday’s watchlist looked at EUR/GBP’s potential range breakdown ahead of the U.K. fiscal plans announcement. Be sure to check out if it’s still a valid play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

U.S. Philly Fed index down from -8.7 to -19.4 in Nov vs. -6.0 estimate

U.S. Oct building permits down from 1.56M to 1.53M, housing starts dip to 1.43M

Japanese Oct national core CPI up from 3.0% to 3.6% y/y vs. 3.5% forecast

BOJ Governor Kuroda admits inflation could still keep rising in coming months

U.K. Nov GfK consumer confidence index up from -47 to -44 vs. -46 estimate

U.K. Oct retail sales rebounded 0.6% m/m after previous 1.5% slump

North Korea fired a suspected ICBM near Japanese coast

Upcoming Potential Catalysts on the Forex Economic Calendar:

U.S. existing home sales at 3:00 pm GMT
U.S. CB leading index at 3:00 pm GMT
BOE MPC member Haskel’s speech at 5:15 pm GMT

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

What to Watch: USD/CAD

USD/CAD 4-hour Forex Chart

USD/CAD 4-hour Forex Chart

It’s shaping up to be a bit of a quiet end to the trading week, at least in terms of economic releases, so I’m looking at a simple trend play on USD/CAD.

The pair has formed lower highs and lower lows connected by a falling channel that’s been holding since mid-October.

Price looks ready for another pullback to the channel resistance, which is right smack in line with the 61.8% Fibonacci retracement level.

The 100 SMA is below the 200 SMA to confirm that the selloff is more likely to resume than to reverse, and the former even lines up with the channel top to add to its strength as a ceiling.

Stochastic is suggesting that sellers are ready to take over, as the oscillator is moving south from the overbought zone. In that case, USD/CAD might be well on its way to test the swing low at 1.3223 or the channel bottom.

Only a couple of low-tier data points are up for release from the U.S. economy today, so market players might take their cues from risk sentiment instead.

By the looks of it, risk-off flows are in play, following the suspected ICBM launch from North Korea and likely delays in China’s reopening.

If this somber mood keeps up, I’d look out for a safe-haven rally and a bullish USD/CAD breakout!