Good morning Forex Kings,
We have a busy week coming up and our focus will turn to the NZD tomorrow.
We are firstly looking at the USDCAD as it approaches a major resistance zone, as well as extreme overbought conditions.
The USD has rallied against all major currencies as the safe haven demand for USD increased. The CAD has suffered a 4-5 week loosing streak as crude oil prices reached yearly lows. The corona-virus has resulted in a decreased demand of crude oil as the manufacturing industry is on lock down. However, a number of companies are now returning to work as the 14 day quarantine period comes to an end.
This week we see a large amount of data coming from the US, the DXY (USD INDEX) is also in extreme overbought conditions suggesting we may see a pull back on the USD soon.
USDCAD – Daily Time Frame
The USDCAD is now at a resistance level of 1.3330, the next major zone can be found at 1.3380 which will be our second entry point.
Technical indicators are suggesting overbought conditions.
USDCAD – 4 Hour Time Frame
The strategy here is to attack the peak, allowing some drawdown if it breaks to the next resistance level.
Trade Setup 1: SELL USDCAD (market order 1.3315): Stop loss 1.3450, take profit: 1.3200
Stop loss: 135 PIPS
Take Profit: 115 PIPS
Trade Setup 2: SELL LIMIT – 1.3380, stop loss 1.3450, take profit 1.3200
Stop loss: 70 PIPS
Take Profit: 180 PIPS