USD/CAD trade setups as Canada's inflation report looms
USD/CAD sits just below a known level heading into Tuesday’s Canadian inflation report, providing a potential setup for bulls or bears depending on the price action evolves.
1.3792 is the level in question, acting as both support and resistance on multiple occasions earlier this year. Sitting less than 10 pips away, how the price interacts with the level before or after the inflation data should inform you on what setup to choose.
With RSI (14) and MACD providing bullish signals on momentum, the path of least resistance appears higher near-term. If we were to see the price break and hold above 1.3792, longs could be initiated with a stop below for protection. Possible targets include 1.3947 or 1.39777, two levels coinciding with former market peaks.
Alternatively, if the price were to be rejected at the level, you could sell with a stop above for protection. Potential targets include 1.3708, 1.3647 or 200-day moving average.
With nine consecutive bullish daily candles, equalling the run seen in July, it’s safe to assume near-term positioning in stretched in favour of USD longs, suggesting an upside surprise in the inflation report may deliver the greatest market impact. Another bullish candle on Tuesday would make this the longest winning streak since 2017.
Good luck!
DS
1.3792 is the level in question, acting as both support and resistance on multiple occasions earlier this year. Sitting less than 10 pips away, how the price interacts with the level before or after the inflation data should inform you on what setup to choose.
With RSI (14) and MACD providing bullish signals on momentum, the path of least resistance appears higher near-term. If we were to see the price break and hold above 1.3792, longs could be initiated with a stop below for protection. Possible targets include 1.3947 or 1.39777, two levels coinciding with former market peaks.
Alternatively, if the price were to be rejected at the level, you could sell with a stop above for protection. Potential targets include 1.3708, 1.3647 or 200-day moving average.
With nine consecutive bullish daily candles, equalling the run seen in July, it’s safe to assume near-term positioning in stretched in favour of USD longs, suggesting an upside surprise in the inflation report may deliver the greatest market impact. Another bullish candle on Tuesday would make this the longest winning streak since 2017.
Good luck!
DS
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