Is the trend my friend on USD/CAD? This pair is forming a descending channel on its daily time frame and might be ready to test resistance soon.
Short USD/CAD Trade
The BOC interest rate decision is coming up this week, so I’m counting on more volatility for this pair in the days ahead. No actual interest rate changes are expected, but any dovish remarks might still be enough to drive USD/CAD up to the channel top around 1.3500.
Besides, price just broke through the mid-channel area of interest, so it might have enough upside momentum to make it to the top. Stochastic is crawling lower from the overbought zone, though, so a return in selling pressure might be in order soon.
Other top-tier releases to watch out for include the Canadian jobs report, crude oil inventories data, and the U.S. non-farm payrolls figure. Talk about a busy week!
First up, the EIA report might show yet another draw in stockpiles but probably not enough to top the other week’s reduction of 10 million barrels. In that case, crude oil could take some hits and drag the positively-correlated Loonie along with it.
Next, the Canadian jobs report is slated to show a gain of 18.9K versus the projected 24.2K reduction in hiring. If so, this could be enough to keep the channel top intact, especially if the U.S. NFP report prints a slower 160K increase in employment or a much lower read.
Oh, and Fed head Powell also has a speech lined up on Friday, so this could add even more volatility to the mix!
I’m looking to short at 1.3475 with a stop just past the previous highs (1.3575) and a target at the lows around 1.3015.
What do you guys think?
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