Simon Alagbe analyzes USD/CAD on April 15, 2020, identifying a key resistance level and two sets of economic data releases: U.S. retail sales at 1:30 PM GMT+1 and three Canadian releases at 3 PM. He walks through placing pending buy-stop and sell-stop orders with specific entry prices and take-profit levels.
Chapters
Good day, welcome to Rally Academy's daily market analysis. My name is Alagbe Simon, a market analyst with Rally Academy. Today we'll be looking out for trading opportunity on USD/CAD. So let's take a look at the USD/CAD chart. Okay, so this is the instrument on the hourly chart. This is it also on the 4 hours as well as on the daily chart. Okay. Okay, this is nice. So looking at it here, we would be able to see clearly— looking at it here on the hourly charts, we'll see that it is approaching a proven resistance. And at this point, it is not safe for us to enter a buy yet. We need to hold on and ensure that USD/CAD is able to close above this proven resistance if we are to be looking out for opportunity to buy USD/CAD. But by virtue of the economic data expected from the 2 countries today— so let's take a look at the Forex Factory. That's on forexfactory.com. This is the site. We need to ensure that this time is synchronized to our own local time. So click on the time this way and ensure we— the time zone is in line with your own time zone. DST should be off, and it's in our own best interest for it to be on AM/PM so that we can easily relate with the time. So we save the settings And, um, return back to the site. So by 1:30 PM GMT+1, we are expecting core retail sales month by month and then retail sales data from the United States. That's in the next less than 1 hour, the next 45 minutes or thereabouts. We're expecting the retail sales data from the United States. And checking the previous data from the, the Census Bureau would discover that the last time that this data came out, it came out well below the forecast. The actual was -0.4%, while it was predicted that core retail sales would have grown by 0.1%. So it was really, really a bad one for the dollar the last time this data came out. So let's check the other one, the retail sales. That also came well below the forecast. So we should be looking out for this data by 1:30 PM. And because of this data expected today, what we'll basically be doing on USD/CAD would be to set pending orders. So that we'll be able to take advantage of the movement on this instrument. By 3 PM, we'll be expecting 3 key economic data from Canada. The Bank of Canada will release the monetary policy report, the Bank of Canada rate statement, as well as the overnight rate. If you remember last month, the bank had 2 emergency meetings which was outside their normal schedule. The outcome of those two emergency meetings were the reduction in overnight rates. We would have our finger crossed till 3 p.m. today to discover if the Bank of Canada will also do the same thing just as they did at the previous two meetings they had last month, or they will keep the rate constant at 0.25. We need to pay more attention to the rate statement as well as. The monetary policy report because it will give us a view of the economic condition in Canada. So we would know, we will know if the country is currently coping well with the economic impact of COVID-19. So let's return back to our charts and then take some position, some pending position on USD/CAD. Um, as we can see here, we have a very strong resistance in view on this instrument. So we— it is not safe for us to enter a buy trade as at this time because we are very close to a very key level. So the best bet is for us to wait and have this instrument overturn this resistance level, and then we can have our buy trade up until this next verified resistance. That's in one direction. Provided the two data expected by 1:30 comes out positive, our buy trades will be activated and we'll have it meet our take profit ahead of the data from Canada. Peradventure the data doesn't come out positive, it comes out well short of expectation, we would also be having a sell trade, a pending sell trade below this support level here, this strong support, and we have our TP before this next support. I will show us how to set, um, those 2 pending orders ahead of the 2 economic data so we can make some very good money for ourselves on USD/CAD today. So let's start with the pending buy order. So go to new order Because it has not gotten to the point yet. We're envisaging it to go above the resistance, so we pick pending order and we go for a buy stop. We also need to pick, um, the entry price should be above the resistance, at least about 10 pips above the resistance. Okay, we around 20 pips, which is okay, which is okay. Okay, so 1.40943, 1.40943. So we have our buy stop. Let's adjust TP volume. Minimum of 0.05, or we can go higher than that. 0.1, 0.05 is okay. 1.40955, 1.40955. So replace that. So once USD/CAD is able to get to this point, this pending order would be turned to a buy trade and And we'll be looking at having our TP somewhere around this region. That's 1.41419. Let me also add that. Modify or delete other. 1.41419. So we've added our take profit and our— okay, so we are done with, um, the pending buy order. Let's also do the same for the pending sell order. We should be looking at a point below the support, which is around this region. Let me just mark that out, okay, as the point at which we enter a sell trade. And then we have our TP somewhere here. That's fine, so somewhere there. So we also do the same thing. So the same way, we also have our pending sell trade. We click New Order, we change this from Instant Execution, we change it to Pending Order, and then the type of execution to Sell Stop. We are picking Sell Stop because we are expecting USD/CAD to go below this support, this nearest support, and then push lower. We picked Sell Stop because we're envisaging that USD/CAD will go below this support and then get to this point and continue to trade lower up until this point. So if that happens, then we'll be making money on this trade. So what's our entry point? We have 1.39751. So we place that and then we go back for our TP. Also modify or delete other— this is our TP. 1.39412. Yeah, that's great. So we've been able to set these 2 very important points for this instrument. So once USD/CAD is able to get to any of these 2 points, this— the particular point that gets to, the trade will be triggered. We're having a pending trade because USD/CAD is very close to a resistance, and we are expecting key economic data from the 2 countries. So for us to be on the safer side and for us to be able to take advantage of any of the movements that takes place during those very key moments on this instrument, these 2 positions we've been picked will be very crucial for us to make some money on USD/CAD. So let's also do the same on our charts. Let's make some money on USD/CAD today. And if you have any question, let's get back to us via feedback@rally.trade. Do have a wonderful trading day today.
