Taking into account the current economic situation in the world, FED's monetary policy and the economic situation in Canada, there is quite a high probability that USDCAD will fall.
What is the reason for the USDCAD drop option? This is, among others, the following:
1. The Canadian labour market is in good shape (labour market report);
2. Bank of Canada is slightly optimistic about future forecasts;
3. The growth momentum on oil should translate positively into GDP growth and the rhetoric of the Central Bank of Canada;
4. The dollar is overbought and there is a chance for at least a short/medium term correction;
5. Price Action is exhausted, suggesting a greater probability of decline than further growth;
...
What may be the obstacles to the implementation of this investment idea?
1. Strong Dollar, speculation on USDollars to increase;
2. Decline in Oil (but that would be a good opportunity to buy CAD, i.e. sell USDCAD);
3. A change in FED rhetoric to a more neutral or even temporary reduction in rates (trade tension China-USA as one of factors), which could increase the chance of further USD breakout. A drop in interest rates stimulates inflationary pressure, so investors buying dollars could postpone their decision to close long positions..
...
There is only one element missing to be fully happy - the knockout of Stoplosses for other market participants, so that large players can take over from them the short positions on usdcad.
This is one of my visions that will not necessarily work, but has a high probability that it will work and the profits should be greater than the potential risk.
Good luck ;)
What is the reason for the USDCAD drop option? This is, among others, the following:
1. The Canadian labour market is in good shape (labour market report);
2. Bank of Canada is slightly optimistic about future forecasts;
3. The growth momentum on oil should translate positively into GDP growth and the rhetoric of the Central Bank of Canada;
4. The dollar is overbought and there is a chance for at least a short/medium term correction;
5. Price Action is exhausted, suggesting a greater probability of decline than further growth;
...
What may be the obstacles to the implementation of this investment idea?
1. Strong Dollar, speculation on USDollars to increase;
2. Decline in Oil (but that would be a good opportunity to buy CAD, i.e. sell USDCAD);
3. A change in FED rhetoric to a more neutral or even temporary reduction in rates (trade tension China-USA as one of factors), which could increase the chance of further USD breakout. A drop in interest rates stimulates inflationary pressure, so investors buying dollars could postpone their decision to close long positions..
...
There is only one element missing to be fully happy - the knockout of Stoplosses for other market participants, so that large players can take over from them the short positions on usdcad.
This is one of my visions that will not necessarily work, but has a high probability that it will work and the profits should be greater than the potential risk.
Good luck ;)
評論:
There is also my previous analysis on the chart :)
評論:
The first move has passed now :)