Good morning team,

 

Although we are looking at a long term DXY top in place, we are expecting a counter trend bullish rally on the US dollar. This is due to an increased demand for the safe haven currencies as tensions are rising between the US and China. Nanci Pelosi’s visit to Taiwan is raising a number of alarm bells, and China views this as an act of aggression. Hopefully this comes to nothing, however short term we see a stronger US dollar playing out over the next couple of days. The USDCAD has broken a technical structure to the upside indicating a bullish move should play out.

USDCAD 4 Hour Chart

Trade Setup: BUY market execution, current price 1.2881, stop loss 1.2769 and take profit target 1.3064.

Stop loss: 112 pips

Take profit: 183 pips