Buying dips offers good risk/reward in USDCAD
The US dollar was seen correcting lower during this past week against the Canadian dollar. However, the USDCAD pair found buyers around an important trend line on the weekly chart, and after that the pair also managed to clear an important resistance area around the 1.10 levels. So, I think the pair might continue trading higher in the short term, and any dips should present us a nice buying opportunity.
There is a strong support area around the 1.1020-00 area on the hourly chart of the USDCAD pair. There is also a bullish trend line, which coincides with the mentioned support area. So, if the pair moves a bit lower from the current levels towards the mentioned support area, makes a stop and forms a bullish divergence, then we can enter into a buy trade.
Initial target should be around the 1.1090 level, and final target could be around the 1.1120 level. Stop should be placed below the 1.0940 level.
Major events scheduled in the upcoming week
There was finally some relief for the Euro buyers, as the EURUSD pair managed to settle around the 1.2900 level. Moreover, the Euro was also seen trading higher against the Australian dollar and the New Zealand dollar. The US dollar performed best against the Japanese yen and the Australian dollar during this past week. The AUDUSD pair traded below the 0.9100 level and the USDJPY pair blasted above the 107.00 level. The US retail sales was the only major economic release during this past, which was mostly according to the market’s forecast.
Let us look at all major events lined up in the upcoming week.
Sunday – Australia’s New motor vehicle sales data.
Monday – Swiss PPI data, US industrial production data and NY empire state manufacturing index.
Tuesday – UK CPI data, German ZEW economic sentiment, US PPI data and New Zealand’s GDP data.
Wednesday –UK employment data, Euro zone CPI, US CPI and Japanese trade balance data.
Thursday – UK retail sales data, US housing starts figure, US initial jobless claims and Philadelphia fed manufacturing index.
Friday –German PPI, Canadian CPI and Canadian wholesale sales data.
This analysis is taken from Weekly Market Forecast, which also includes trade opportunities on: GBPCHF, EURGBP, USDJPY, EURJPY, GBPJPY, AUDUSD, NZDUSD, AUDNZD, EURAUD, USDCAD and AUDCAD.