For today’s U.S. watchlist, we’re checking out a solid uptrend in USD/CAD, likely supported by the recent oil crash headlines and weak economic updates around the world.
Are there more pips to catch for the bulls or is a pullback ahead before the end of the U.S. session?
Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on EUR/GBP ahead of U.K. unemployment data, so be sure to check that out to see if there is still a potential play!
|Equity Markets||Bond Yields||Commodities & Crypto|
|DAX: 10370.35 -2.86%
FTSE: 5684.67 -2.20%
S&P 500: 2773.55 -1.76%
DJIA: 23276.69 -1.61%
|US 10-yr 0.558% -0.068
Bund 10-YR -0.479% -0.034
UK 10-YR: 0.298% -0.038
JPN 10-YR: 0.019 +0.006
|Oil: 0.84 +102.23%
Gold: 1694.10 -0.99%
Bitcoin: 6846.21 -0.12%
Etherium: 171.02 -0.28%
Fresh Market Headlines & Economic Data:
- Oil continues unprecedented sell-off: June futures drop 30%, May contract still has a negative price
- Wall Street opens lower as U.S. crude collapse adds to pandemic worries
- U.S. existing home sales tumble in March
- Retail sales rose for the fourth consecutive month, up 0.3% to $52.2 billion in February.
- German investors see light at end of ‘very long tunnel’ – ZEW
- UK employment growth slowed in March as COVID began to hit: ONS
- BoE’s Haldane voices doubt over rapid UK coronavirus recovery
- Switzerland’s trade balance closed in the first three months of 2020 with a surplus of CHF 8.3 billion.
Upcoming Potential Catalysts on the Forex Calendar for U.S. & Asia:
- API Crude oil inventory at 8:30 pm GMT
- Australia Leading index at 1:30 am GMT (Apr. 22)
What to Watch: USD/CAD
In case you missed it, the financial news of the week was the big crash in oil prices yesterday, and if you did miss it, check out Forex Gump’s coverage in his article, “What’s The Deal With Negative Crude Oil Prices?!”
This event seemed to not only put pressure on oil related assets like the Canadian dollar, but it sparked global risk-off sentiment as the demand destruction in oil is signaling a significantly bad economic situation in the world.
This is actually another argument for pressure on the Loonie, as well as drawing traders back into Greenbacks, which has been beaten up lately thanks to the massive stimulus programs from the U.S.
So, the setup to watch is if a long position in USD/CAD if you feel the momentum will continue and there won’t be any catalysts for the rest of the U.S. session into the Wednesday trading session to change the market’s mood.
The pair is actually pulling back from the intraday highs around 1.4265 to nearly test the broken minor resistance area marked on the one hour chart above around 1.4150. Look out for support / bullish reversal patterns there, especially if the stochastic signals potentially oversold conditions before considering a long position.
For the more aggressive bulls on USD/CAD out there, considering scaling into a long position from current levels down to that area of interest around 1.4150 if you fear missing out on the uptrend. Just remember to adjust position size and stops appropriately if you have a plan for multiple entries.