Over night the USD surged across all major pairs as the FED raised alarm bells about the US economy despite the uptick in people returning to work. The demand for the safe haven currencies increased as global equities dropped from record highs.
The USDCAD has broken a key technical structure and we may see the pair continue to rise tonight during the US initial jobless claims data release.
The 0.618 Fib retracement level is the magic number. We are looking to enter a long position from the 1.3200 zone expecting the market to move higher. This will also set up to be an inverted head and shoulders formation. Resistance levels can be found at 1.3259 and 1.3290.
Trade Setup: BUY LIMIT – Entry price 1.3200, stop loss 1.3165 and take profit targets 1.3258 and 1.3290.
Stop loss: 35 pips
Take profit: 58-90 pips