Free Profitable Forex Newsletter
Hey! This is Philip with a market update of the Free Profitable Forex Newsletter!
It is the Thanksgiving holiday in the US, so we can expect the compressed volatility in Forex to persist today and tomorrow. Also, aside from the low volatility, the outlook for most pairs is mostly unclear, and no specific trading opportunity jumps out at the moment.
Thus, we are not giving a specific trade signal this week, but rather an interesting situation to monitor on the USDCAD pair that could provide a trade opportunity at some point later.
Technicals: USDCAD before a breakout!
With that said, let’s first take a look at the technical picture of USDCAD, as a potential trade could be created based purely on the technicals.
The USDCAD pair has reached interesting levels in recent days. It presently finds itself between a resistance and a support line, and is also trading inside a rising channel, as shown in the chart below.
The support of this channel is at 1.3270, while resistance is at the 1.3330 highs. Nothing has been triggered or confirmed yet, so there is not much more to do than just watching and waiting for an opportunity to be created.
The clarity of the technical situation should help in trading the potential breakout, either to the upside or the downside:
- A bullish breakout above the 1.3330 resistance would mean that USDCAD is proceeding higher within the already existing bullish channel. The 1.34 - 1.3450 area would be resistance in this case.
- In case of a bearish breakout from current levels, then USDCAD could fall toward the 1.3150 and 1.3100 price areas.
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A potential Harmonic Gartley Pattern may also be in play later
Furthermore, a potential bullish breakout will open the possibility for a bearish harmonic Gartley pattern to come in to play at a later stage, also show on the chart. The harmonic resistance of this Gartley pattern is at the 1.3400 - 1.3450 area, where a bearish reversal could occur. It’s worth noting that harmonic patterns are highly reliable, so if the Gartley will be completed, it could be another great opportunity.
However, if a bearish breakout of the channel occurs before USDCAD proceeds above the 1.3300 resistance, then the whole Gartley harmonic pattern will be cancelled out.
CAD Fundamentals Also Neutral; Watching Tomorrow’s GDP report
The situation is not clear here, as it was, for example, a few weeks ago after the Bank of Canada made a surprise dovish announcement when we sent a bullish USDCAD trade idea (that banked a nice profit).
That move has run its course, and the market has adjusted to the more dovish BOC, New triggers will be needed now to push USDCAD higher or lower. The technical situation confirms this as well, as discussed above.
Looking at the economic releases ahead, Friday’s GDP data will move the Canadian Dollar. Expectations are modest, and given the BOC cautiousness, it won’t be surprising if the actual report disappoints.
Such an outcome would likely push USDCAD higher, breaking above the 1.33 resistance. On the other hand, strong GDP numbers could push USDCAD lower and break the rising channel, in which case USDCAD would likely be heading toward the 1.31 support again.
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Trade signals from the past weeks
- November 20, 2019 - Short EURUSD from 1.1060, 1st target reached at 1.10 = +60 pips profit
- November 08, 2019 - Long NZDCAD from 0.8385 (still in progress), around +150 pips profit currently
TOTAL: +60 pips profit in the past week
TOTAL: +2225 pips profit since October 1, 2018
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High Risk Warning: Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.
Any opinions, news, research, predictions, analyses, prices or other information contained in this newsletter is provided as general market commentary and does not constitute investment advice. FX Trading Revolution will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
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