Forex Technical Analysis USD/CAD 2014-03-06
IFC Markets | Mar 06, 2014 09:15AM ET
Good afternoon, dear traders. Today at 14:30 (CET) the Building Permits statistics for Canada strikes out. The indicator is published on a monthly basis and shows the change in building permits given by the government. This indicator allows assessing the real estate sector capacity, the growth of consumption goods of secondary demand and products of the technological sector in a consequence. If the index exceeds the forecast of 1.9% growth, the attractiveness of the national currency towards the foreign investors should be expected.
For the reasons described above, we continue analyzing the technical situation for the USDCAD. Yesterday there was a breakthrough of the weekly trend line downwards, that is a strong bearish signal especially taking into account the fact that the Parabolic SAR and the first Pivotresistance crossed the weekly support line. The price also crossed the signal Pivot line downwards. This means that the mathematical and graphical analysis of the indicators confirm the market direction. As we can see, the daily falling channel continues its winning streak to the red zone. Note that the RSI-Bars fully confirms the daily trend downward momentum.
The preliminary target can be set at 161.8% Fibonacci level, but cautious traders are recommended to limit profits above the daily support line. The accurate target can be set independently after the support level violation at 1.10230 down. Most likely, it will happen after 14:30 (CET).
It is recommended to open a pending sell order 15 minutes before the Building Permits publication and to hold it in case the macroeconomic indicator value exceeds the forecast (1.9%). The position should be kept till 16:00 (CET). At this time the optimism index for Canada Ivey PMI strikes out. Thus it would be wise to switch an open position into a break-even condition 10 minutes before the data release and to wait for Canadian news about the market reaction. With continued downward momentum the stop loss should be moved after theParabolicSAR.
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