Simon Alagbe analyzes USD/CAD on June 3, 2020, identifying support at 1.35199 and linking the Canadian dollar's weakness to falling oil prices and a new Bank of Canada governor. He outlines two trade setups: a buy stop at 1.35837 and a sell stop at 1.34736, with the overall trend bearish.
Chapters
Good day, you are welcome to Rally Academy's daily market analysis. My name is Alagbe Simon, a market analyst with Rally Academy. Today, the 3rd day of the month of June in the year 2020, we will be looking out for trading opportunity on USD/CAD. Okay, so Let's look at the instrument on the daily time frame. For some of us that have been following up on analysis on USD/CAD for a couple of weeks now, we have envisaged that USD/CAD is going to test this support at 1.35199, and eventually yesterday USD/CAD was able to get to that support region. And from what you can see on the daily charts, we're having some retracements of that very strong support region. So let's look at this instrument on the hourly chart. Okay, also on the hourly charts, you would see the strong support region that we drew on the daily charts. And then here we can also still identify a fairly strong support around this price region. So once USD/CAD is able to go above this price region for today, then we can have a buy trade off this region and then have our take profit around this price level. Um, let's also check on oil, which is Canada's major export product. And see what is currently happening on that instrument. Okay, so this is oil also, and then from what you can see on oil at this time, we're having a very sharp retracement of a resistance on oil. So the weakness we have noticed in the Canadian dollar as at this point in time could be attributed to one, this current fall in the price of oil because a large chunk of Canada's revenue is generated from the sale of oil to the United States. So with oil prices dropping, we expect some weakness in the loonie. And then also there is going to be a change at the helm of affairs in the Bank of Canada today. Stephen Pollock will be handing over to Steve Marklin as the new governor of the Bank of Canada. So that change at the end of affairs also expected to weigh slightly on the looning, and we can see the impact already on this instrument, USD/CAD. But it's not still very safe for us to have a buy trade yet. Let's still wait for it to, um, overcome this current resistance on the hourly charts, then we can have our target at this price level. But we should still have it at the back of our mind that the overall trend on this instrument still remains bearish. So we should buy cautiously, having it in mind that the overall trend on it for now is still very bearish. So let's check on the fundamental front if there's any major economic data that we're expecting today that will still influence movement on this instrument. Okay, let me just adjust the time. Brussels, just— okay, same settings. I return back to the home page. Okay, so today by 1:15 PM, we're expecting ADP non-farm employment change. So this is a precursor to the non-farm payroll or non-farm employment change that will be coming out on Friday. And then by 3 PM, the BoC rate statements. This will be, um, Steve Macklin's first assignment in office, as well as, um, the overnight rate from Canada. And then also by 3 PM, the ISM Manufacturing PMI will be released from the United States. So we have a number of fundamentals that will still generate a lot of volatility on this instrument for today. So a lot of opportunity for us to, um, still make some very good money from USD/CAD today. So let me also highlight some point for us. For adventure, we'll be looking out for sell opportunity on this instrument. So this is still USD/CAD on the hourly charts. Okay, so for a sell, we'll be looking out for a point at this price level and then can have our target at this price level. So we have our sell at this price, that is the point at which is able to go below this low. This is the recent low on the hourly chart. Once it's able to go below the low, then we can have this sell and then have our take profit at this price level. So let me just show us how to place pending orders to take advantage of either of these 2 directions on this instrument. Today. So we go to new order for the buy. We are going for a pending order, so we change this to a buy stop at price level 1.35837. So replace that. I also need to adjust my take profit. Let me, um, have the trade again. So I do this, add another buy stop at 1.35837, and then my take profit at 1.36298, with my stop loss at this price level. That's 1.351 99. So I can place the buy trade. So the same way for the sell, I do a pending order, then the sell stop at price level 1.34736, and then the take profit is at 1.34372. And my stop loss will be at this price level, 1.35397. So I place that too. Okay, so do have a very wonderful day today and take advantage of all these proposed moves on USD/CAD. Thank you.
