Simon Alagbe outlines a short-term bullish trade on USD/CAD with a buy-stop entry at 1.40463 and take-profit target around 20-30 pips higher. He cites weak Canadian GDP and upcoming ISM Manufacturing PMI at 3 PM GMT+1 as supporting factors, recommending traders wait for a retest of the 38.2% Fibonacci level before entering.
Chapters
Happy new month and happy Workers' Day. My name is Alagbe Simon, a market analyst with Rally Academy. Today, the 1st of May, year 2020, we would be looking out for trading opportunity on USD/CAD. This is USD/CAD on the daily chart, and we can see the instrument was sitting comfortably Now that was, um, yesterday on a support region, and then from there it was able to surge higher from that support. And the current candle for today is still pushing higher and currently above the 38.2 retracement level. Let's also observe the instruments on the 4-hour charts. Okay, so we can also see on the 4-hour charts also that the instrument has been able to go above the 38.2, but this candle will be closing in the next 4 hours on, um, the 4-hour chart. And for us to be able to pick entry points on this instrument, let's move, um, to the hourly charts. Let's also check what is happening. So if we observe on the hourly charts, you can see this move here surged higher Then there is a slight retracement at this point, and then now it's doing this way. This is at this point, and currently having another form of retracement. So it's expected to retest this 38.2 level before it will continue on this move. We have something like this. So at the point where USD/CAD is able to go above this high at this level— this is the recent high— so any price level above this high would be a good one for us to have our buy, and we can target around 20-30 pips from our entry price level. So we can have our entry price around this price level. Yes, and then we have about 30 pips from that price level. Let me just also pick that out. So we're expecting some retracements to retest the 38.2 as well as the support level. So it's a confluence around, um, this region. So retest at this region before it continues on this move. If it's able to go above this price level, then we would know that it has been able to successfully establish a new high which is higher than this high, and then a new trend would be established on this instrument. So how do we take advantage of this proposed bullish move on it after the retest on this support level. So we have to go with, um, a buy stop from this price level, and then we have our take profit at this price level. We'll go to the new order, we'll change our execution from instant to pending, and then we have a buy stop because we expect USD/CAD to retest and then continue to surge higher. So we have our price level at 1.40463, and then our take profit is at price level 1.40624. So our stop loss will be beneath, uh, this support level. Um, let me also mark that out. We'll be beneath the support level. Yeah, so we can have our stop loss at this price level also. So our stop loss at 1.40047. So we have our trade in place. Let's also check on the fundamental fronts concerning this instrument today if you're expecting any major economic data that might also impact the movements on this instrument for today. So let's quickly check on Forex Factory. So this is forexfactory.com. So, and today is Friday the 1st of May. By 3 PM GMT+1, we will be expecting ISM Manufacturing PMI. Uh, the last time the data came out, that was April 1st. Last month, the data was better than forecast, and if a repeat of these also take place today, then we expect the bullish move on USD/CAD to even become stronger than it is at this moment. Yesterday, we had a couple of economic data. Unemployment claims came out not so good for the US, but the GDP data from Canada. Came out also very bad for Canada. And if we check the US dollar against major currency pair apart from the Canadian dollar, the dollar is pretty weak against other pair except the Canadian dollar, which shows that this GDP data that came out yesterday has seriously weakened the loonie, and that weakening is still expected to continue today, especially if ISM Manufacturing PMI expected by 3 PM comes out slightly better than this forecast. Although the forecast has been adjusted slightly lower than what we had, um, the previous time, which was April 1st, we all know what is currently happening around the world. The coronavirus is seriously weighing on economies around the world, and that has also been priced into this forecast today. So if it's able to still surge slightly higher than this, then it would be a very good time to still continue the buy on USD/CAD. But for now, you can still wait for a retest on this 38.2 as well as the support region, and then take advantage of the bullish move on this instrument. So have a very good day today, and then let's make some money off USD/CAD. Thank you.
