Tomasz Wisniewski
Axiory Global Ltd.
The first Friday of the month is usually very busy for the USD but also for the CAD. Friday’s usually the day we have job data from both those markets and they do definitely shake up the charts. This Friday was better for the American currency as the NFP and unemployment rate were both better than expected. In Canada the unemployment rate dropped but the change was actually negative, a lot further below expectations. After that, it was a no brainer for traders which direction to choose, and the USDCAD ended on monthly highs.
Monday brings us quite a big correction, which you may find surprising because there isn’t a huge fundamental explanation for that. There doesn’t have to be, because not every move on the chart has to be explained by the data/events or statements. Sometimes it’s just pure consensus between demand and supply based on one of the technical factors, in this case – a horizontal resistance on the 1.295 (lower green). This level has been important since December last year and traders respected it once more, just like that.
Today’s bounce is part of something bigger though. The price is currently creating a right shoulder of a big H&S pattern (yellow). The formation isn’t active yet as the neckline (red) is intact. The price breaking the neckline will be a real, mid-term sell signal, but that’s still a hypothesis, for now.
In my opinion, the sentiment on USDCAD will remain negative as long as the price stays below 1.295 or even 1.308 (upper green), which has gained some importance over the last few months. The target for the next few weeks is the black up trendline, and chances that we’ll get there are quite high.
Trading FX/CFDs on margin bears a high level of risk, and may not be suitable for all investors. Before deciding to trade FX/CFDs you should carefully consider your investment objectives, level of experience, and risk appetite. You can sustain significant loss.
Recommended Content
Editors’ Picks
EUR/USD climbs to 10-day highs above 1.0700
EUR/USD gained traction and rose to its highest level in over a week above 1.0700 in the American session on Tuesday. The renewed US Dollar weakness following the disappointing PMI data helps the pair stretch higher.
GBP/USD extends recovery beyond 1.2400 on broad USD weakness
GBP/USD gathered bullish momentum and extended its daily rebound toward 1.2450 in the second half of the day. The US Dollar came under heavy selling pressure after weaker-than-forecast PMI data and fueled the pair's rally.
Gold struggles around $2,325 despite broad US Dollar’s weakness
Gold reversed its direction and rose to the $2,320 area, erasing a large portion of its daily losses in the process. The benchmark 10-year US Treasury bond yield stays in the red below 4.6% following the weak US PMI data and supports XAU/USD.
Here’s why Ondo price hit new ATH amid bearish market outlook Premium
Ondo price shows no signs of slowing down after setting up an all-time high (ATH) at $1.05 on March 31. This development is likely to be followed by a correction and ATH but not necessarily in that order.
Germany’s economic come back
Germany is the sick man of Europe no more. Thanks to its service sector, it now appears that it will exit recession, and the economic future could be bright. The PMI data for April surprised on the upside for Germany, led by the service sector.