USD/CAD: Potential swing trade short
We outlined a bearish bias in a previous USD/CAD article which clearly did not play out, thanks to hawkish comments from Fed members, hawkish FOMC minutes and stronger economic data for the US. However, a strong Canadian employment report on Friday has now seen odds shift in favour of a 25bp BOC hike this week – and if that is to be coupled with a soft(er) than expected US inflation report, perhaps we’ll finally see that swing trade short play out after all.
A 3-wave rally has stalled at the 50% retracement level and 50-day EMA to suggest a swing high is in place. We’ve seen a minor attempt to retrace within Friday’s range during Asian trade (and a higher retracement would be welcomed to help improve the potential reward to risk ratio).
Assuming momentum has realigned with the bearish daily trend, a move towards (and break beneath) the June low on its way to 1.3000 is now in focus.
A 3-wave rally has stalled at the 50% retracement level and 50-day EMA to suggest a swing high is in place. We’ve seen a minor attempt to retrace within Friday’s range during Asian trade (and a higher retracement would be welcomed to help improve the potential reward to risk ratio).
Assuming momentum has realigned with the bearish daily trend, a move towards (and break beneath) the June low on its way to 1.3000 is now in focus.
Operación cerrada: objetivo alcanzado:
The initial target near the June low was reached on Thursday thanks to a set of soft CPI and PPI data from the US. Friday's bullish engulfing candle now sees us step aside for the time being.
