Overview:– Pair is showing too much volatility and now it has become trending when most of the traders were selling it and pair was heading upside. The upside rally started from 1.2957 and ended at 1.3363 with full of bullish momentum, but now it seems like bulls have become tired and heading to south side which is giving us bearish signal.
In our previous report also we mentioned to short the pair at 1.3300 level for the target of 1.3210 level with the stop loss of 1.3440 level and our target have been achieved successfully.
Technical Analysis:– A gravestone doji followed by a bearish marabuzo candlestick is providing us bearish signal. It’s just a starting we will get further bearish signal below the 1.3300 level. It seems like bears have snatched the bite from bull’s mouth and it’s time to sell the pair with good risk and reward ratio.
Overall bulls are driving the car and heading north side but now they are trying to hand over the game in the bear’s hand which will be an early call, but if today bears able to take it down below 1.3300 level then it will be confirmation of bears stake and it will open the way towards the 1.3200 level in near term. Overall pair is trading between all the major and minor EMA line which is providing strength in the pair so it is not going to be easy for bears.
We are seeing trend line support holding and a valid breakout of this line will open the way towards the 1.3100 level.
Fundamental Analysis:- The USD/CAD pair continued losing ground through the early European session and is currently placed near the lower end of its daily trading range, just below the 1.3300 round-figure mark. The pair failed to capitalize on the previous session’s goodish intraday positive move to four-month tops and met with some fresh supply. . A modest rebound in crude oil prices underpinned demand for the commodity-linked currency. Despite concerns over the economic impact of the deadly corona virus, the expected new round of economic stimulus measures by China provided a modest boost to the global risk sentiment. This eventually triggered a rally in equity markets and led the recovery in oil prices, now up over 1% for the day.
Meanwhile, the US dollar stood tall near multi-week tops and was further supported by a strong pickup in the US Treasury bond yields. traders, however, seemed unimpressed by sustained USD buying interest, rather preferred to lighten their bullish position ahead of the FED Chair Jerome Powell’s semiannual testimony before the congress.
The RSI turned back from overbought territory which is providing trend reversal signal whereas a bearish crossover on the MACD indicator is providing us bearish signal. Odds are in favor of bears and intraday bias remains bearish on the pair as long as 1.3400 level remains intact. It’s an early sell call but there is good risk and reward ratio to sell the pair here.
What next:- The 1.3400 level is key resistance level followed by 1.3500 level whereas 1.3250 level is key support level follwed by 1.3200 level.
Trade idea:- Based on chart and studies above we can suggest to our readers that go for sell around 1.3350 level for the target of 1.3250 level and 1.3200 with the tight stop loss of 1.3400 level.
