Good morning Forex Kings,
A good week so far, our first entry on oil has been activated.
We are now turning our attention to the USDCAD – this appears to be stretched to the extreme!
Investors have been jumping on the USD due to its safe haven appeal, however the USDCAD has now reached a major double top, the move higher looks extremely impulsive.
Oil prices have started to pick up this morning and if the continue to do so, the CAD will strengthen as the currency is dependant on oil prices.
DXY – USD Index
The USD on its own is reaching a key level and moving into overbought conditions.
USDCAD – Daily Charts
The 1.4670 level appears to be a major resistance level. Trump will not want the USD to strengthen much further as it has a negative impact on exports from the US.
This could potentially have a long way down if we see a reversal here.
Trade set up: SELL USDCAD Market entry (1.4507) – Stop loss 1.4587 and take profit left open to run but at least targeting 1.4300.
Stop loss: 80 PIPS
Take profit: 207 PIPS
We are using a tight stop loss, if the stop loss is hit we will enter again from a higher level.
The higher this goes, the further it will fall, don’t be alarmed if our first stop loss is hit on this one.