On a larger time frame the USDCAD is a Long Trade. This is because of divergent monetary expectations with regard to the BoC and the Fed with the latter having recently cut rates for the CAD and a rate hike being priced in for the USD.
This is a technical short off the 1.300 Handle that confluences with the 261.8 Fib extension of the Bearish corrective wave from 1.25160 to 1.22180, visible on the Daily Chart to the right. On the same D1 TF, Stochastic Oscillator (12,3,3) is indicative of overbought conditions as candlesticks are getting smaller by the day, a sign of slowed momentum.
A rebound off the 38.2 Fib Retracement is expected as a minor corrective wave attempts to find support. A correction of more than 50% of the current Bull Wave is unlikely. Long positions will later be taken as soon as PA is favorable. Patience pays.
Other important technical levels have been demarcated on the charts.
Risks:
This is a technical short off the 1.300 Handle that confluences with the 261.8 Fib extension of the Bearish corrective wave from 1.25160 to 1.22180, visible on the Daily Chart to the right. On the same D1 TF, Stochastic Oscillator (12,3,3) is indicative of overbought conditions as candlesticks are getting smaller by the day, a sign of slowed momentum.
A rebound off the 38.2 Fib Retracement is expected as a minor corrective wave attempts to find support. A correction of more than 50% of the current Bull Wave is unlikely. Long positions will later be taken as soon as PA is favorable. Patience pays.
Other important technical levels have been demarcated on the charts.
Risks:
- No correction takes place, technical breakout occurs past 1.300. Influx of Buy Stops hit at that region will cause more Bulls to check in.
- Calling tops, especially against established momentum is a dangerous thing to do. You can never be really sure.
